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Ursula von der Leyen will not make her proposal for the portfolios and structure of her new Commission public today, but only next Tuesday at 9 a.m. in Strasbourg. The reason for the delay is probably of a technical nature: The Slovenian parliament will only formulate its assessment of the candidate Marta Kos, who was recently proposed by the Slovenian government, on Friday. Only then will the nomination be “complete and official”, according to Brussels.
Nevertheless, nerves are clearly on edge in some government and party headquarters. According to press reports with relevant personnel speculation, agitated heads of government are regularly calling Brussels.
The Socialists are demanding more weighty portfolios for their few representatives in the new Commission, above all for the Spaniard Teresa Ribera. The head of the socialist party family, Stefan Löfven, warned: “As the socialist family of Europe, it is time to issue a clear warning for the next mandate of the Commission.” The Socialists’ support for von der Leyen was never a “blank cheque”.
The former Swedish Prime Minister is calling for Nicolas Schmit, the Socialists’ lead candidate in the European elections, to become Commissioner again. However, he would have to be nominated by Luxembourg’s Christian Democrat Prime Minister Luc Frieden. Löfven also warns against a reduced role for women in the new Commission and castigates the fact that a Commissioner from the “far right” ECR should become Senior Vice-President.
It is unclear whether all of this is in line with the Commission President’s plans. Nor is it clear whether the resistance of the socialists will lead her to reconsider her plans. Von der Leyen is guarding the structure of her Commission like a state secret. Not even cabinet members of current and future commissioners are aware of it. Instead, they are currently preparing the “confirmation hearings” of their bosses on three different portfolios, as can be heard in the corridors of the Berlaymont.
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The headlines about Mario Draghi’s report on the competitiveness of the EU were dominated by the discussion about common debt. But much of the report is not about the financing issue. Rather, the aim of the report is to enable the EU to pursue a more effective industrial policy – European debt or not.
“The report provides a strong intellectual foundation for a European industrial strategy. We haven’t had that before”, says Sander Tordoir, Chief Economist at the think tank Center for European Reform (CER).
The foundation consists of four possible industrial policy strategies that the EU can pursue, depending on the objective it is pursuing in a specific sector.
Nils Redeker, Deputy Director of the Jacques Delors Centre, also finds Draghi’s outline helpful. In order for the proposed strategies to be implemented effectively, the Directorates-General in the Commission need to work together more closely, he believes. “Draghi is giving the Commission an important coordination task”, says Redeker.
In principle, coordination could be achieved by merging the various dossiers under one Commissioner. However, this is politically difficult, as the DGs Trade, Grow and Comp are three of the most powerful DGs. Alternatively, coordination could be achieved through stronger leadership by Commission President Ursula von der Leyen herself.
However, the task of coordination also falls to the other legislators. Both the EU Council and the Parliament are divided into Council formations or parliamentary committees, in which the economy, trade and industry have so far been discussed relatively independently of each other.
The chairman of the European SPD, René Repasi, who welcomes Draghi’s “whole of government” approach, is in favor of horizontal formats in which exchanges can be ensured. The Parliament has also adapted its rules of procedure for the new legislature, which should facilitate cooperation between the committees on horizontal dossiers.
However, Repasi emphasizes that the Commission in particular must adapt. After all, it has the right of initiative and even the exclusive authority to act in the area of competition law.
The ball is therefore in the Commission’s court. It must now prioritize the large list of proposals for action, says Redeker. But – as Redeker and Tordoir emphasize – the Commission can get some of Draghi’s proposals rolling very soon:
Some of these steps are very likely to be taken by the next Commission. For example, von der Leyen has already announced a reform of public procurement in her political guidelines, with which she wants to promote European products. She has also announced the launch of additional and simpler IPCEIs for 2025.
Two court rulings in one day save Margrethe Vestager’s legacy as EU Competition Commissioner. The European Court of Justice confirmed her decisions to order Apple to pay €13 billion in back taxes in Ireland and to demand a fine of €2.4 billion for abuse of a dominant market position in the Google Shopping case.
During her first term of office, Vestager gained an international reputation as an energetic competition watchdog. However, several of her sensational decisions were later overturned by the courts.
Vestager was aware that another defeat, particularly in the spectacular Apple case, would have seriously damaged her record. “I was ready to face the loss but it was the win that made me cry“, she said emotionally. She freely admitted that she had been pleasantly surprised by the verdict. The first instance had upheld the appeal by the group and the Irish government. The ECJ ruling is now final.
In 2016, Vestager ordered Ireland to claim €13 billion in back taxes (plus interest) from Apple. In two tax rulings, the Irish tax authorities had illegally allowed the US company to artificially reduce its tax burden at its EU headquarters since 1991. Apple had thus been able to attribute the majority of its taxable profits to two subsidiaries that existed only on paper and were not taxed anywhere. The Commission deemed this to be illegal state aid.
Apple CEO Tim Cook described the decision as “political crap” at the time. The company argued that the intellectual property rights were held at its headquarters in Cupertino and that the profits from them were therefore taxed in the USA. The ECJ has now ruled that the IP licenses held by the two Irish subsidiaries and the associated profits generated from the sale of Apple products outside the United States should have been attributed to the Irish branches for tax purposes.
Vestager had also taken action against preferential tax treatment of large corporations such as Amazon or Starbucks in Belgium, the Netherlands and Luxembourg, but suffered several defeats in court. With the Apple ruling, the Commission is now not only receiving a tailwind from the ECJ, but has also “gained some legal certainty for its future action against tax practices“, says Sarah Blazek, partner at the law firm Noerr. The ruling is a clear signal for other large corporations operating in the EU. The decision is also “a warning to the national finance ministers, who must pay more attention to solidarity between the 27 EU member states in the future”, warned Andreas Schwab, internal market policy spokesperson for the EPP Group.
Vestager said that the Commission’s approach had led to a rethink in some cases. Ireland and Luxembourg, for example, had stopped the practices in question. “Unfortunately, aggressive tax planning practices are still widespread”, she criticized. Four EU countries, namely Ireland, the Netherlands, Luxembourg and Belgium, still played a central role in the shifting of profits by corporations at the expense of taxpayers.
The Commission still has a number of state aid proceedings in the pipeline due to tax practices. It has launched formal investigations into IKEA, Nike and the Finnish packaging manufacturer Huhtamäki. Her successor will have to decide how to proceed, said Vestager.
The parties involved in the Google case described the ruling as nothing less than historic and groundbreaking. These included the Federal Association of Digital Publishers and Newspaper Publishers (BDZV) and the Media Association of the Free Press (MVFP) as well as the price comparison platform Idealo. The ECJ ruling shows “that our persistent efforts for justice and fair market conditions have paid off”, commented Albrecht von Sonntag, co-founder and advisory board member of Idealo, on the decision. It is a victory for e-commerce as a whole and, above all, for consumers.
This is also the view of the European consumer organization BEUC. “Google harmed millions of European consumers by making competing shopping comparison services virtually invisible”, said BEUC Director General Agustín Reyna.
The Commission imposed a fine of around €2.4 billion on Google in 2017 because the company had abused its dominant position in several national markets for online search services. According to the decision, Google had favored its own price comparison service to the detriment of competitors. As the General Court essentially confirmed this decision, Google appealed to the Court of Justice. The ECJ has now rejected this appeal, meaning that the judgment is now final.
This case represents a decisive change in the way digital companies are regulated and also perceived, said Vestager. A precedent has been set and the way has been paved for further regulatory measures, including the Digital Markets Act (DMA).
Google expressed its disappointment. The ruling was based on a very specific set of circumstances. The company had already made changes in 2017 to comply with the decision of the Brussels authority. “Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 price comparison services”, said a spokesperson.
In fact, this case also has a bad aftertaste. This is because the earliest complaints date back 17 years. In 2007, the British price comparison service Foundem filed a complaint accusing Google of manipulating its search results in such a way that it favored its own services and disadvantaged competitors. Today, the Commission calls this self-preferencing.
Next week, the EU General Court will rule on a similar case. The question is whether Google unlawfully obstructed other providers of search engine advertising in the AdSense for Search service and whether the EU Commission’s fine of €1.49 billion was justified.
Brief hope in the asylum conflict, then failure: After a good two hours, the negotiators from the CDU/CSU parliamentary group left the Federal Ministry of the Interior. For the time being, there is no agreement on a common approach to asylum policy. There were recriminations on both sides. Both the traffic lights and the CDU/CSU accused each other of making proposals that would either not work quickly or were not legally feasible. The result: For the time being, the traffic light coalition and the CDU/CSU have failed to solve a major problem for society. An obvious side effect: Pressure from the CDU/CSU has brought the notoriously divided coalition back together for the first time in a long time.
The CDU/CSU had demanded that in the future, federal police officers at the border should turn back all people who come from another EU country and want asylum. In their opinion, this was not legally uncontroversial, but possible – and it was politically indispensable, because only this step would ensure that something would change very quickly and noticeably for everyone. Beforehand, they repeatedly referred to a legal review carried out in the BMI under former Minister Horst Seehofer. It stated that this step was possible in emergency situations.
Minister for the Interior Nancy Faeser nevertheless rejected the demand. Together with Minister for Justice Marco Buschmann and Minister for Foreign Affairs Annalena Baerbock, she declared that the Union’s idea was legally and politically indefensible. Buschmann emphasized that a federal government could not be expected to “openly contradict the Basic Law and European law“. Baerbock referred to initial reactions from Austria and Poland, which had sharply criticized the Union’s plans. According to Baerbock, the traffic light coalition and the Greens in particular are determined to fight illegal migration with all legal means. But: “We would only be doing the terrorists a great favor if we were to argue about this in the EU.”
The Ampel had offered the Union the alternative of setting up centers near the border for accelerated asylum procedures. Asylum applications are to be processed quickly and with legal certainty in these centers. Faeser emphasized that illegal migration in particular could be better controlled by forcing people into such centers than by simply turning them away, where no one knows whether these people will immediately attempt to cross the green border again. Similar demands from the CSU in 2015 and the following years were vehemently rejected by the FDP, Greens and SPD at the time. Now the Union’s proposal itself was no longer sufficient. It criticized that this would take too long and that people would therefore not be able to recognize changes to the current situation quickly enough.
Both sides know what failure means. The first message is that the democratic center has failed to find a common solution. For this reason, there were conciliatory tones from the traffic light and the CDU/CSU on Tuesday evening. The CDU/CSU parliamentary group said that it would “critically and constructively accompany the traffic light’s migration policy in the Bundestag and make its own constructive proposals”. The unmistakable emphasis was on constructive. The traffic light coalition said that it would implement its own proposals, but would by no means close itself off to further talks.
Christian Lindner provided a slightly different tone and reading in the evening. He sharply criticized the CDU’s termination of the migration talks. “The CDU has made a tactical mistake here. The CDU is quite rightly calling for refoulement at Germany’s borders, and the traffic light coalition is prepared to do so”, Lindner told Table.Briefings. “We are prepared to adopt the CDU’s model, but then everyone must jointly assume the administrative risks.” The FDP leader was alluding to the legal risks of a possible rejection of asylum seekers at Germany’s borders.
According to Lindner, the CDU nevertheless stood up and left the talks. “There was obviously a script. You have to be lenient and allow the CDU to correct itself.” No centrist party would benefit if the issue of migration became part of the federal election campaign. “Only the fringes will benefit.”
The EU Commission initially did not wish to comment on the German measures. The German government had registered the measures in Brussels and they were now being carefully examined, explained chief spokesman Eric Mamer and Anitta Hipper, the spokeswoman responsible for migration, in Brussels on Tuesday. They were in talks with Berlin and did not want to anticipate the outcome of the review.
As a general rule, border controls must be “necessary and proportionate” and comply with the provisions of the Schengen Borders Code, explained Hipper. ” Such measures should therefore remain an absolute exception,” she emphasized. Cross-border patrols are preferable to national measures. However, Germany is not alone.
According to a list from the EU Commission, eight EU states have currently registered temporary border controls in Brussels. In addition to Germany, these include France, Italy, Sweden, Denmark, Slovenia, Norway and Austria. However, most of the measures expire at the end of this year. According to the Schengen Borders Code, the controls must be notified; however, the EU Commission does not have a right of veto.
The Commission did not want to comment on the question of whether asylum seekers can be turned back at the German border if they have applied for asylum in another EU country. The spokespersons for the authorities also did not comment on possible domino effects in other EU states. This is “speculation”, said Hipper. Austria has already announced that it will not accept refugees rejected by Germany.
Other countries such as France and Belgium apparently want to wait and see. The German government has informed the Belgian authorities, said Interior Minister Annelies Verlinden. So far there has been no need for action. Poland, on the other hand, called German border controls unacceptable. He would begin consultations as soon as possible with all countries that would be affected by such a step, said Prime Minister Donald Tusk.
However, there were no signs of a special session in the Council on Tuesday. The European Parliament also remained calm. Refoulement at the German border is an “interim option” until the new migration pact comes into force, EPP leader Manfred Weber had already explained on Sunday in the ARD Europamagazin. The CSU politician thus backed the initiative of CDU leader Friedrich Merz. Whether the plans were coordinated by von der Leyen (CDU) remained open.
Germany wants to be climate-neutral by 2045. The automotive industry is firmly behind this goal. We are convinced that innovation and investment are key to achieving this goal and are therefore investing around €280 billion in research and development between 2024 and 2028 alone.
We need every technology to achieve the climate targets we have set ourselves. The ramp-up of electromobility will certainly make a decisive contribution here – but renewable fuels and hydrogen are other interesting options. In addition, especially for the defossilization of the vehicle fleet: With renewable fuels, the existing fleet can be operated in a largely climate-neutral manner.
For this lever to be used, the right decisions must now be made and incentives set. A key lever for climate protection in the transport sector is the greenhouse gas reduction quota (GHG quota). If designed correctly, it can trigger billions in investment in renewable energy sources for the transport sector. In its current form, however, it is not ambitious enough and therefore tends to inhibit investment.
To understand this, it is worth taking a look at how it works: The GHG quota sets annual CO2 reduction targets for the petroleum industry. For example, CO2 emissions must fall by 9.25 percent this year; by 2030, the figure will rise to 25.1 percent. The targets can be achieved by placing charging electricity, biofuels, hydrogen and e-fuels on the market.
Alternatively, obligated companies can achieve the targets through third parties utilizing certificates in GHG quota trading. These certificates are generated by service providers from owners of electric cars, trucks and buses and sold to the petroleum industry. This creates investment leverage concerning the charging station infrastructure and for the production of biofuels, hydrogen and e-fuels.
The GHG quota price is formed freely on the market – the influencing factors here are the supply and demand of renewable energy sources in the transport sector, the level of the GHG quota and its possible overfulfilment. In principle, therefore, the GHG quota is a suitable instrument for reducing CO2, especially in times of the current tight budget situation, as it does not require financial subsidies or taxpayers’ money.
But what does the level of the GHG quota have to do with this? The fact that the GHG quota was recently exceeded is only partly due to sufficient renewable energy sources. This is because certain energy sources are counted more than once when they are placed on the market – in the case of charging current, hydrogen and e-fuels even with a triple factor. In plain language: One kilowatt hour of electricity, one kilogram of hydrogen and one liter of e-fuel each count as much as three. Climate protection is therefore much greater on paper than in reality.
This principle makes sense for the market ramp-up phase because it incentivizes investment in the respective technologies. However, with increasing quantities of renewable energy sources, the gap between real and calculated climate action is widening. The fact is, however, that the Climate Protection Act stipulates real net greenhouse gas neutrality for 2045! This is why the long-term use of multiple offsetting is not expedient; on the contrary, what is needed now is investment in real climate action.
If the availability of renewable energy sources in the transport sector is too high, the GHG quota acts as a cap that slows down investment and causes the GHG quota price to fall. If the targets are met, there is no longer any incentive to invest beyond them. Multiple credits reinforce this effect because they accelerate target fulfillment without substance. If the number of available certificates exceeds the demand on the market, the quota price falls. This is problematic for two reasons: Firstly, the placing of fossil fuels on the market can be balanced out by purchasing additional certificates. This keeps the fossil fuel business alive.
On the other hand, a quota price that is too low inhibits the ramp-up of zero-emission vehicles, such as fuel-cell trucks. These are currently still more expensive than vehicles with combustion engines. Zero-emission vehicles can participate in GHG quota trading. The GHG quota prices are currently around €100 for cars, €1,100 for commercial vehicles and €2,400 for buses. Last year, GHG quota prices were around three times as high. The reason for the fall in prices is overfulfillment of the GHG quota. By participating in GHG quota trading, a significant proportion of the additional costs can be offset over the vehicle’s service life. In other words: Clean vehicles are financed by the income from the GHG quota.
Three conclusions can be drawn from these mechanisms: Firstly, the GHG quota must be more ambitious. High targets mobilize investments in renewable energy sources in the long term. Taking into account multiple offsets, the GHG quota must also increase accordingly in order to incentivize the real share of renewable energy sources. The current GHG quota will rise to 25.1 percent by 2030; the EU is planning a CO2 reduction of 90 percent by 2040, Germany of 100 percent by 2045. The leap from 25 percent in 2030 to 90 percent in 2040 can hardly be achieved if we do not invest now.
Secondly, the GHG quota must be dynamic upwards. If it is exceeded, it must increase automatically by means of a fixed mechanism in order to maintain investment incentives in renewable energy sources. Otherwise, the GHG quota will act as a cap in the event of unexpectedly large quantities of renewable energy sources, slowing down investment and causing the GHG quota price to fall. The fulfillment of the GHG quota in recent years has shown that the available energy quantities, for example for charging electricity and advanced biofuels, have been significantly underestimated.
Thirdly, multiple offsetting must be gradually reduced. This will reduce the discrepancy between real and virtual climate action. Climate action must no longer only take place on paper. The planned review in 2027 would be a good time to gradually reduce multiple counting in order to close the gap between virtual and real climate action, ideally by 2030. An exception should be made for hydrogen, which is actually still in the market ramp-up phase. As there will still be no significant quantities of green hydrogen in the transport sector in 2030, multiple credits should be phased out here by the end of the 2030s.
However, it is also clear that quotas alone will not encourage the ramp-up of renewable energy sources. Accompanying measures are also needed, such as a reform of the Energy Tax Directive and a long-term target path to 2045.
As a market-based instrument, the GHG quota does not require a single cent of taxpayers’ money. With an appropriate level of ambition and dynamic fulfillment, it will trigger billions in investments in renewable energy sources. When redesigning the GHG quota, it is crucial to set investment incentives for the ramp-up of renewable energy sources in the transport sector – and to ensure the ramp-up of zero-emission vehicles.
Andreas Rade is Managing Director for Politics and Society at the German Association of the Automotive Industry (VDA).
Ursula von der Leyen will not make her proposal for the portfolios and structure of her new Commission public today, but only next Tuesday at 9 a.m. in Strasbourg. The reason for the delay is probably of a technical nature: The Slovenian parliament will only formulate its assessment of the candidate Marta Kos, who was recently proposed by the Slovenian government, on Friday. Only then will the nomination be “complete and official”, according to Brussels.
Nevertheless, nerves are clearly on edge in some government and party headquarters. According to press reports with relevant personnel speculation, agitated heads of government are regularly calling Brussels.
The Socialists are demanding more weighty portfolios for their few representatives in the new Commission, above all for the Spaniard Teresa Ribera. The head of the socialist party family, Stefan Löfven, warned: “As the socialist family of Europe, it is time to issue a clear warning for the next mandate of the Commission.” The Socialists’ support for von der Leyen was never a “blank cheque”.
The former Swedish Prime Minister is calling for Nicolas Schmit, the Socialists’ lead candidate in the European elections, to become Commissioner again. However, he would have to be nominated by Luxembourg’s Christian Democrat Prime Minister Luc Frieden. Löfven also warns against a reduced role for women in the new Commission and castigates the fact that a Commissioner from the “far right” ECR should become Senior Vice-President.
It is unclear whether all of this is in line with the Commission President’s plans. Nor is it clear whether the resistance of the socialists will lead her to reconsider her plans. Von der Leyen is guarding the structure of her Commission like a state secret. Not even cabinet members of current and future commissioners are aware of it. Instead, they are currently preparing the “confirmation hearings” of their bosses on three different portfolios, as can be heard in the corridors of the Berlaymont.
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The headlines about Mario Draghi’s report on the competitiveness of the EU were dominated by the discussion about common debt. But much of the report is not about the financing issue. Rather, the aim of the report is to enable the EU to pursue a more effective industrial policy – European debt or not.
“The report provides a strong intellectual foundation for a European industrial strategy. We haven’t had that before”, says Sander Tordoir, Chief Economist at the think tank Center for European Reform (CER).
The foundation consists of four possible industrial policy strategies that the EU can pursue, depending on the objective it is pursuing in a specific sector.
Nils Redeker, Deputy Director of the Jacques Delors Centre, also finds Draghi’s outline helpful. In order for the proposed strategies to be implemented effectively, the Directorates-General in the Commission need to work together more closely, he believes. “Draghi is giving the Commission an important coordination task”, says Redeker.
In principle, coordination could be achieved by merging the various dossiers under one Commissioner. However, this is politically difficult, as the DGs Trade, Grow and Comp are three of the most powerful DGs. Alternatively, coordination could be achieved through stronger leadership by Commission President Ursula von der Leyen herself.
However, the task of coordination also falls to the other legislators. Both the EU Council and the Parliament are divided into Council formations or parliamentary committees, in which the economy, trade and industry have so far been discussed relatively independently of each other.
The chairman of the European SPD, René Repasi, who welcomes Draghi’s “whole of government” approach, is in favor of horizontal formats in which exchanges can be ensured. The Parliament has also adapted its rules of procedure for the new legislature, which should facilitate cooperation between the committees on horizontal dossiers.
However, Repasi emphasizes that the Commission in particular must adapt. After all, it has the right of initiative and even the exclusive authority to act in the area of competition law.
The ball is therefore in the Commission’s court. It must now prioritize the large list of proposals for action, says Redeker. But – as Redeker and Tordoir emphasize – the Commission can get some of Draghi’s proposals rolling very soon:
Some of these steps are very likely to be taken by the next Commission. For example, von der Leyen has already announced a reform of public procurement in her political guidelines, with which she wants to promote European products. She has also announced the launch of additional and simpler IPCEIs for 2025.
Two court rulings in one day save Margrethe Vestager’s legacy as EU Competition Commissioner. The European Court of Justice confirmed her decisions to order Apple to pay €13 billion in back taxes in Ireland and to demand a fine of €2.4 billion for abuse of a dominant market position in the Google Shopping case.
During her first term of office, Vestager gained an international reputation as an energetic competition watchdog. However, several of her sensational decisions were later overturned by the courts.
Vestager was aware that another defeat, particularly in the spectacular Apple case, would have seriously damaged her record. “I was ready to face the loss but it was the win that made me cry“, she said emotionally. She freely admitted that she had been pleasantly surprised by the verdict. The first instance had upheld the appeal by the group and the Irish government. The ECJ ruling is now final.
In 2016, Vestager ordered Ireland to claim €13 billion in back taxes (plus interest) from Apple. In two tax rulings, the Irish tax authorities had illegally allowed the US company to artificially reduce its tax burden at its EU headquarters since 1991. Apple had thus been able to attribute the majority of its taxable profits to two subsidiaries that existed only on paper and were not taxed anywhere. The Commission deemed this to be illegal state aid.
Apple CEO Tim Cook described the decision as “political crap” at the time. The company argued that the intellectual property rights were held at its headquarters in Cupertino and that the profits from them were therefore taxed in the USA. The ECJ has now ruled that the IP licenses held by the two Irish subsidiaries and the associated profits generated from the sale of Apple products outside the United States should have been attributed to the Irish branches for tax purposes.
Vestager had also taken action against preferential tax treatment of large corporations such as Amazon or Starbucks in Belgium, the Netherlands and Luxembourg, but suffered several defeats in court. With the Apple ruling, the Commission is now not only receiving a tailwind from the ECJ, but has also “gained some legal certainty for its future action against tax practices“, says Sarah Blazek, partner at the law firm Noerr. The ruling is a clear signal for other large corporations operating in the EU. The decision is also “a warning to the national finance ministers, who must pay more attention to solidarity between the 27 EU member states in the future”, warned Andreas Schwab, internal market policy spokesperson for the EPP Group.
Vestager said that the Commission’s approach had led to a rethink in some cases. Ireland and Luxembourg, for example, had stopped the practices in question. “Unfortunately, aggressive tax planning practices are still widespread”, she criticized. Four EU countries, namely Ireland, the Netherlands, Luxembourg and Belgium, still played a central role in the shifting of profits by corporations at the expense of taxpayers.
The Commission still has a number of state aid proceedings in the pipeline due to tax practices. It has launched formal investigations into IKEA, Nike and the Finnish packaging manufacturer Huhtamäki. Her successor will have to decide how to proceed, said Vestager.
The parties involved in the Google case described the ruling as nothing less than historic and groundbreaking. These included the Federal Association of Digital Publishers and Newspaper Publishers (BDZV) and the Media Association of the Free Press (MVFP) as well as the price comparison platform Idealo. The ECJ ruling shows “that our persistent efforts for justice and fair market conditions have paid off”, commented Albrecht von Sonntag, co-founder and advisory board member of Idealo, on the decision. It is a victory for e-commerce as a whole and, above all, for consumers.
This is also the view of the European consumer organization BEUC. “Google harmed millions of European consumers by making competing shopping comparison services virtually invisible”, said BEUC Director General Agustín Reyna.
The Commission imposed a fine of around €2.4 billion on Google in 2017 because the company had abused its dominant position in several national markets for online search services. According to the decision, Google had favored its own price comparison service to the detriment of competitors. As the General Court essentially confirmed this decision, Google appealed to the Court of Justice. The ECJ has now rejected this appeal, meaning that the judgment is now final.
This case represents a decisive change in the way digital companies are regulated and also perceived, said Vestager. A precedent has been set and the way has been paved for further regulatory measures, including the Digital Markets Act (DMA).
Google expressed its disappointment. The ruling was based on a very specific set of circumstances. The company had already made changes in 2017 to comply with the decision of the Brussels authority. “Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 price comparison services”, said a spokesperson.
In fact, this case also has a bad aftertaste. This is because the earliest complaints date back 17 years. In 2007, the British price comparison service Foundem filed a complaint accusing Google of manipulating its search results in such a way that it favored its own services and disadvantaged competitors. Today, the Commission calls this self-preferencing.
Next week, the EU General Court will rule on a similar case. The question is whether Google unlawfully obstructed other providers of search engine advertising in the AdSense for Search service and whether the EU Commission’s fine of €1.49 billion was justified.
Brief hope in the asylum conflict, then failure: After a good two hours, the negotiators from the CDU/CSU parliamentary group left the Federal Ministry of the Interior. For the time being, there is no agreement on a common approach to asylum policy. There were recriminations on both sides. Both the traffic lights and the CDU/CSU accused each other of making proposals that would either not work quickly or were not legally feasible. The result: For the time being, the traffic light coalition and the CDU/CSU have failed to solve a major problem for society. An obvious side effect: Pressure from the CDU/CSU has brought the notoriously divided coalition back together for the first time in a long time.
The CDU/CSU had demanded that in the future, federal police officers at the border should turn back all people who come from another EU country and want asylum. In their opinion, this was not legally uncontroversial, but possible – and it was politically indispensable, because only this step would ensure that something would change very quickly and noticeably for everyone. Beforehand, they repeatedly referred to a legal review carried out in the BMI under former Minister Horst Seehofer. It stated that this step was possible in emergency situations.
Minister for the Interior Nancy Faeser nevertheless rejected the demand. Together with Minister for Justice Marco Buschmann and Minister for Foreign Affairs Annalena Baerbock, she declared that the Union’s idea was legally and politically indefensible. Buschmann emphasized that a federal government could not be expected to “openly contradict the Basic Law and European law“. Baerbock referred to initial reactions from Austria and Poland, which had sharply criticized the Union’s plans. According to Baerbock, the traffic light coalition and the Greens in particular are determined to fight illegal migration with all legal means. But: “We would only be doing the terrorists a great favor if we were to argue about this in the EU.”
The Ampel had offered the Union the alternative of setting up centers near the border for accelerated asylum procedures. Asylum applications are to be processed quickly and with legal certainty in these centers. Faeser emphasized that illegal migration in particular could be better controlled by forcing people into such centers than by simply turning them away, where no one knows whether these people will immediately attempt to cross the green border again. Similar demands from the CSU in 2015 and the following years were vehemently rejected by the FDP, Greens and SPD at the time. Now the Union’s proposal itself was no longer sufficient. It criticized that this would take too long and that people would therefore not be able to recognize changes to the current situation quickly enough.
Both sides know what failure means. The first message is that the democratic center has failed to find a common solution. For this reason, there were conciliatory tones from the traffic light and the CDU/CSU on Tuesday evening. The CDU/CSU parliamentary group said that it would “critically and constructively accompany the traffic light’s migration policy in the Bundestag and make its own constructive proposals”. The unmistakable emphasis was on constructive. The traffic light coalition said that it would implement its own proposals, but would by no means close itself off to further talks.
Christian Lindner provided a slightly different tone and reading in the evening. He sharply criticized the CDU’s termination of the migration talks. “The CDU has made a tactical mistake here. The CDU is quite rightly calling for refoulement at Germany’s borders, and the traffic light coalition is prepared to do so”, Lindner told Table.Briefings. “We are prepared to adopt the CDU’s model, but then everyone must jointly assume the administrative risks.” The FDP leader was alluding to the legal risks of a possible rejection of asylum seekers at Germany’s borders.
According to Lindner, the CDU nevertheless stood up and left the talks. “There was obviously a script. You have to be lenient and allow the CDU to correct itself.” No centrist party would benefit if the issue of migration became part of the federal election campaign. “Only the fringes will benefit.”
The EU Commission initially did not wish to comment on the German measures. The German government had registered the measures in Brussels and they were now being carefully examined, explained chief spokesman Eric Mamer and Anitta Hipper, the spokeswoman responsible for migration, in Brussels on Tuesday. They were in talks with Berlin and did not want to anticipate the outcome of the review.
As a general rule, border controls must be “necessary and proportionate” and comply with the provisions of the Schengen Borders Code, explained Hipper. ” Such measures should therefore remain an absolute exception,” she emphasized. Cross-border patrols are preferable to national measures. However, Germany is not alone.
According to a list from the EU Commission, eight EU states have currently registered temporary border controls in Brussels. In addition to Germany, these include France, Italy, Sweden, Denmark, Slovenia, Norway and Austria. However, most of the measures expire at the end of this year. According to the Schengen Borders Code, the controls must be notified; however, the EU Commission does not have a right of veto.
The Commission did not want to comment on the question of whether asylum seekers can be turned back at the German border if they have applied for asylum in another EU country. The spokespersons for the authorities also did not comment on possible domino effects in other EU states. This is “speculation”, said Hipper. Austria has already announced that it will not accept refugees rejected by Germany.
Other countries such as France and Belgium apparently want to wait and see. The German government has informed the Belgian authorities, said Interior Minister Annelies Verlinden. So far there has been no need for action. Poland, on the other hand, called German border controls unacceptable. He would begin consultations as soon as possible with all countries that would be affected by such a step, said Prime Minister Donald Tusk.
However, there were no signs of a special session in the Council on Tuesday. The European Parliament also remained calm. Refoulement at the German border is an “interim option” until the new migration pact comes into force, EPP leader Manfred Weber had already explained on Sunday in the ARD Europamagazin. The CSU politician thus backed the initiative of CDU leader Friedrich Merz. Whether the plans were coordinated by von der Leyen (CDU) remained open.
Germany wants to be climate-neutral by 2045. The automotive industry is firmly behind this goal. We are convinced that innovation and investment are key to achieving this goal and are therefore investing around €280 billion in research and development between 2024 and 2028 alone.
We need every technology to achieve the climate targets we have set ourselves. The ramp-up of electromobility will certainly make a decisive contribution here – but renewable fuels and hydrogen are other interesting options. In addition, especially for the defossilization of the vehicle fleet: With renewable fuels, the existing fleet can be operated in a largely climate-neutral manner.
For this lever to be used, the right decisions must now be made and incentives set. A key lever for climate protection in the transport sector is the greenhouse gas reduction quota (GHG quota). If designed correctly, it can trigger billions in investment in renewable energy sources for the transport sector. In its current form, however, it is not ambitious enough and therefore tends to inhibit investment.
To understand this, it is worth taking a look at how it works: The GHG quota sets annual CO2 reduction targets for the petroleum industry. For example, CO2 emissions must fall by 9.25 percent this year; by 2030, the figure will rise to 25.1 percent. The targets can be achieved by placing charging electricity, biofuels, hydrogen and e-fuels on the market.
Alternatively, obligated companies can achieve the targets through third parties utilizing certificates in GHG quota trading. These certificates are generated by service providers from owners of electric cars, trucks and buses and sold to the petroleum industry. This creates investment leverage concerning the charging station infrastructure and for the production of biofuels, hydrogen and e-fuels.
The GHG quota price is formed freely on the market – the influencing factors here are the supply and demand of renewable energy sources in the transport sector, the level of the GHG quota and its possible overfulfilment. In principle, therefore, the GHG quota is a suitable instrument for reducing CO2, especially in times of the current tight budget situation, as it does not require financial subsidies or taxpayers’ money.
But what does the level of the GHG quota have to do with this? The fact that the GHG quota was recently exceeded is only partly due to sufficient renewable energy sources. This is because certain energy sources are counted more than once when they are placed on the market – in the case of charging current, hydrogen and e-fuels even with a triple factor. In plain language: One kilowatt hour of electricity, one kilogram of hydrogen and one liter of e-fuel each count as much as three. Climate protection is therefore much greater on paper than in reality.
This principle makes sense for the market ramp-up phase because it incentivizes investment in the respective technologies. However, with increasing quantities of renewable energy sources, the gap between real and calculated climate action is widening. The fact is, however, that the Climate Protection Act stipulates real net greenhouse gas neutrality for 2045! This is why the long-term use of multiple offsetting is not expedient; on the contrary, what is needed now is investment in real climate action.
If the availability of renewable energy sources in the transport sector is too high, the GHG quota acts as a cap that slows down investment and causes the GHG quota price to fall. If the targets are met, there is no longer any incentive to invest beyond them. Multiple credits reinforce this effect because they accelerate target fulfillment without substance. If the number of available certificates exceeds the demand on the market, the quota price falls. This is problematic for two reasons: Firstly, the placing of fossil fuels on the market can be balanced out by purchasing additional certificates. This keeps the fossil fuel business alive.
On the other hand, a quota price that is too low inhibits the ramp-up of zero-emission vehicles, such as fuel-cell trucks. These are currently still more expensive than vehicles with combustion engines. Zero-emission vehicles can participate in GHG quota trading. The GHG quota prices are currently around €100 for cars, €1,100 for commercial vehicles and €2,400 for buses. Last year, GHG quota prices were around three times as high. The reason for the fall in prices is overfulfillment of the GHG quota. By participating in GHG quota trading, a significant proportion of the additional costs can be offset over the vehicle’s service life. In other words: Clean vehicles are financed by the income from the GHG quota.
Three conclusions can be drawn from these mechanisms: Firstly, the GHG quota must be more ambitious. High targets mobilize investments in renewable energy sources in the long term. Taking into account multiple offsets, the GHG quota must also increase accordingly in order to incentivize the real share of renewable energy sources. The current GHG quota will rise to 25.1 percent by 2030; the EU is planning a CO2 reduction of 90 percent by 2040, Germany of 100 percent by 2045. The leap from 25 percent in 2030 to 90 percent in 2040 can hardly be achieved if we do not invest now.
Secondly, the GHG quota must be dynamic upwards. If it is exceeded, it must increase automatically by means of a fixed mechanism in order to maintain investment incentives in renewable energy sources. Otherwise, the GHG quota will act as a cap in the event of unexpectedly large quantities of renewable energy sources, slowing down investment and causing the GHG quota price to fall. The fulfillment of the GHG quota in recent years has shown that the available energy quantities, for example for charging electricity and advanced biofuels, have been significantly underestimated.
Thirdly, multiple offsetting must be gradually reduced. This will reduce the discrepancy between real and virtual climate action. Climate action must no longer only take place on paper. The planned review in 2027 would be a good time to gradually reduce multiple counting in order to close the gap between virtual and real climate action, ideally by 2030. An exception should be made for hydrogen, which is actually still in the market ramp-up phase. As there will still be no significant quantities of green hydrogen in the transport sector in 2030, multiple credits should be phased out here by the end of the 2030s.
However, it is also clear that quotas alone will not encourage the ramp-up of renewable energy sources. Accompanying measures are also needed, such as a reform of the Energy Tax Directive and a long-term target path to 2045.
As a market-based instrument, the GHG quota does not require a single cent of taxpayers’ money. With an appropriate level of ambition and dynamic fulfillment, it will trigger billions in investments in renewable energy sources. When redesigning the GHG quota, it is crucial to set investment incentives for the ramp-up of renewable energy sources in the transport sector – and to ensure the ramp-up of zero-emission vehicles.
Andreas Rade is Managing Director for Politics and Society at the German Association of the Automotive Industry (VDA).