Charlotte Street Partners



Regulatory momentum

Written by Javier Maquieira, senior associate 
Edited by Katie Stanton, associate partner
9 December 2020

Good morning,

The 2010s will probably go down in history as a revolutionary decade for everyday technology innovations – from tablets to e-readers, social media to streaming – but also for the rise of important concerns over data privacy, copyright, hate speech, and unfair competition.
Perhaps unsurprisingly, the coronavirus pandemic of the 2020s has made most US tech giants more dominant and powerful than ever. Their position as so-called digital “gatekeepers”, running online marketplaces that other companies must use and compete against to trade, has given regulatory initiatives new momentum.
In the European Union, two major proposals are expected to be put forward by the end of this year to curb the power of big tech: the digital services act, which will aim to clarify responsibilities for illegal content and set out rules on transparent advertising and disinformation; and the digital markets act, which will use case-by-case enforcement to investigate digital gatekeepers and intervene in the market “by imposing remedies”.
This legal framework – deliberately asymmetric and aimed at the larger groups – has been welcomed by EU member states and small players, who have called for more rapid action to bring antitrust charges against gatekeepers in a matter of months, rather than years. If passed, the legislation package could potentially level the playing field, but it also risks constraining the capacity of big corporations to adapt, thus hurting small businesses that benefit from that innovation.
The UK’s Competition and Markets Authority is leading a similar regulatory push, as it seeks to set up a digital markets unit with sweeping powers to “prevent [large technology companies] from exploiting their powerful positions” and to foster “vibrant competition and innovation”. The new legislation is expected to be proposed in the coming year, following a consultation with internet companies, publishers, and other interested parties.
Across the pond, US president-elect Joe Biden has often criticised the industry and could use the Department of Justice to pursue more antitrust litigation. However, the presence of former Apple, Facebook, and Google officials on his tech advisory board, along with a number of Amazon executives also listed on his agency review teams, suggests federal oversight of big tech might be more light touch than in Europe.
Whatever the market impacts and political side-effects of new regulations in the UK, Europe and beyond might be, there’s no denying that the 2020s will see big tech companies under further scrutiny. How they choose to operate against this backdrop will ultimately set the direction of travel for everyday innovations to come. 


Joe Biden has vowed to roll out 100m vaccinations in his first 100 days in office. The US president-elect, who is expected to take office on 20 January, said during a press conference in Delaware that his “first 100 days won’t end the Covid-19 virus” but “can change the course of the disease and change life in America for the better.” Without giving further detail, Biden warned that the coronavirus efforts could “slow and stall” if Congress did not urgently come up with funding.
According to full trial data published in The Lancetthe Oxford/AstraZeneca Covid-19 vaccine has been confirmed to have 70% efficacy, after showing efficacy of 90% in a small group who received a half-dose first, but only 62% in the majority. If finally approved, regulatory bodies will have to decide the appropriate dosing regimen.
Scotland’s education secretary, John Swinney, has announced that next year’s Higher and Advanced Highers exams will be cancelled in Scottish schools as a result of the disruptive impacts of coronavirus on the education system. The decision will see pupils’ final grades decided based on the judgement of their teachers.

Business and economy

The prime minister, Boris Johnson, is set to meet with the president of the European Commission, Ursula Von der Leyen, in Brussels this evening in an attempt to use positive momentum generated by a deal on Northern Ireland to break the Brexit impasse. Although the dinner between both leaders isn’t expected to seal the deal, No 10 said the troubled negotiations could be expected to resume on Friday if there was evidence of progress and goodwill.
The logistics industry has written to the UK’s Department for Transport calling for it to help clear severe delays at British ports which are driving an increase in shipping rates and congestion charges. On top of increasing freight costs, representatives of the UK’s ports, shipping and logistics sectors have warned the government about further potential disruption when the Brexit transition period ends in January.
Several clean energy executives have quit Royal Dutch Shell following internal tensions over how far and fast the oil company should shift towards greener fuels. The string of resignations comes weeks before the business is expected to launch its energy transition strategy for reducing dependence on oil and gas revenues, the timeframe of which some of the departing executives find too long. (£)

Columns of note

Writing in the Financial Times, Peggy Hollinger argues that companies should be providing externally benchmarked and recognised training and education to their employees in the good and bad times, in order to retain talent and leave them marketable when their jobs are at risk. As restructuring activity is set to increase in the new year and the pandemic continues to accelerate longer-term shifts such as digitalisation and robotisation, Hollinger writes that businesses need to ensure they are offering life-long career replenishment for all workers. (£)
In the Evening Standard, George Osborne laments that years of leadership changes and elections, Tory battles and labour miscalculations have led the UK closer to facing the largest act of protectionism in its history on 1 January 2021. Listing the groups of winners likely to benefit from a hard Brexit, Osborne argues that time will prove that sacrifices made “to maintain the purity of sovereignty” were all but an illusion, and predicts the UK will end up “voluntarily” shadowing the EU rules and standards that it once helped shape.

Cartoon source: The Telegraph


What happened yesterday?

London stocks ended the session in a mixed state on Tuesday, with the FTSE 100 up 0.05% at 6,558.82 and the FTSE 250 down 0.3% at 19,870.49. Sterling was weaker against both the dollar by 0.19% at $1.34 and the euro by 0.24% at €1.10.
In the US, the main benchmarks hit new record highs, as the S&P 500 index, the Nasdaq Composite, and the Dow Jones Industrial Average closed 0.3%, 0.5%, and 0.4% higher, respectively.
In company news:
G4S has accepted a £3.8bn takeover by Allied Universal Security Services following a three-month bid battle.
Energean was 10.15% lower after Third Point Hellenic Recovery placed around six million shares in the exploration and production company.
Ashtead gained 2.2% after the industrial equipment rental company said full-year results were set to be ahead of its previous guidance.
Ferguson advanced 0.31% after the plumbing and heating products supplier reported a rise in first-quarter core earnings and revenue, driven by a strong performance in all regions.

What’s happening today?

PCF Bank

Duke Royalty  
SDI Group       

CQS Natural Resources
Orchard Funding

UK economic announcements
(09:30) PMI Services

Int. economic announcements
(07:00) Balance of Trade (GER)
(07:00) Current Account (GER)
(12:00) MBA Mortgage Applications (US)
(15:00) Wholesales Inventories (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

The second person ever to receive the Pfizer coronavirus vaccine was named William Shakespeare.

Parliamentary highlights

House of Commons

Oral questions
Prime Minister’s Question Time
Ministerial statement
Withdrawal Agreement Update – Michael Gove
Armed Forces Deployment to UN Mission in Mali – Mr Ben Wallace
Ten Minute Rule Motion
Sexual Exploitation – Dame Diana Johnson
Consideration of a Procedural Motion followed by second reading and Committee of the Taxation (Post-Transition Period) Bill
Local government finance in Croydon – David Simmonds

House of Lords 

Oral questions
Prominence of public broadcasting following recent Ofcom Review – Baroness Bonham-Carter of Yarnbury
Review the Community Resilience Development Framework in the light of the COVID-19 pandemic – Lord Lancaster of Kimbolton
Review of gambling legislation – Lord Browne of Belmont
Reforms proposed in the Prison Reform Trust report: ‘No life, no freedom, no future’ published on 3 December – Lord Brown of Eaton-under-Heywood
Covid-19 vaccine roll out – Lord Bethell
Private Notice Question
Malaria vaccine – Lord Young of Norwood Green
United Kingdom Internal Market Bill – consideration of Commons
amendments – Lord Callanan

Scottish Parliament 

Portfolio Questions
Ministerial Statement
Budget Update
Scottish Conservative and Unionist Party Debate
Responding to Parliamentary Will and Calls for Clarity in Education
Ministerial Statement
Coronavirus Acts: Fourth Report to the Scottish Parliament
Members’ Business
S5M-23117 Graham Simpson: Bus Service Cuts

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