EU Law and Regulatory

In March 2025, the European Union published a white paper for European Defense Readiness 2030, which identifies defense needs and envisions a massive €800 billion four-year “ReArm Europe” investment plan. This initiative is a significant step change from the EU’s prior defense industrial strategy and earlier funding programs.

Rearming Europe would be financed by €150 billion in EU common debt made available as loans to Member States and €650 billion in national spending that EU fiscal rules would not constrain. This new package is intended to support EU Member State efforts to ramp-up defense capabilities and, if implemented, it would effectively double the overall amount of defense spending in Europe. Covington is working with clients in defense industry sectors across the wider West to maximize business opportunities created by this new funding.

Unleashing Europe’s Defense Potential

Given the “rapid deterioration of the geopolitical context and rising tensions,” the white paper pledges to unleash the EU’s resources and latent industrial and technological power on defense. It aims to swiftly increase support for Ukraine and deter Russia’s further aggression, while reducing dependency on U.S. military support. Further, it paves the way to tackle long-term security threats such as the “systemic” challenge posed by China and growing hybrid threats.

The EU seeks to support collaborative capability development among Member States, to enhance coordination and generate economies of scale.  Here, joint procurements will be a privileged tool, notably by setting up a European Military Sales Mechanism. This mechanism will support manufacturing capabilities and deliver more complex projects through aggregated demand and increasing predictability for the sector. To do so, it will incentivise long-term common procurements, as envisioned also by the European defense common procurement act.

In the near-term, investments and procurements on defense industrial capabilities will focus on rebuilding Europe’s depleted stocks of military hardware and equipment. Key capability domains include air and missile defense, artillery systems, ammunition and missiles, drones and counter-drone systems, military mobility, artificial intelligence, quantum, cyber & electronic warfare, strategic enablers and critical infrastructure protection.

To quickly expand its defense capabilities, Europe is also exploring strengthening its defense industrial collaboration with trusted partners such as the Republic of Korea, Norway, and Japan (with which the EU signed Security and Defence Partnerships last year), as well as its traditional allies and partners, such as the United Kingdom and the United States.Continue Reading Rearming Europe with Trusted Partners

On March 20, 2025, the Court of Justice of the European Union (“CJEU”) ruled on the fairness, under EU consumer protection law, of a contractual clause allocating a percentage of an athlete’s income to a professional services provider (Case C‑365/23 [Arce]).  This ruling sets an important precedent and strengthens the protection afforded by consumer protection law to minors who enter into professional service contracts, whether in sport or elsewhere.

Background

The case was referred to the CJEU by a Latvian court.  It concerns a contract whereby a company undertook to provide career support services – including coaching, training, sports medicine, sports psychology, career guidance, club contracts, marketing, legal services, and accounting – to a basketball player, who was a minor at the time and therefore represented by his parents.  In exchange for the company’s services, the athlete agreed to pay 10% of any net income (plus VAT) he would receive over a period of 15 years from the signing of the contract.  At the time of signing the contract, the athlete was not a professional.  Some years later, however, he became a professional athlete.  When the athlete refused to pay the percentage to the company, the company sued him to enforce the contract.  The Latvian courts asked the CJEU, whether it could assess the fairness of this long-term financial commitment under the Latvian legislation implementing Directive 93/13/EEC on unfair terms in consumer contracts (“UCTD”).

Application of the Unfair Contract Terms Directive

Under the UCTD, a contractual clause in a business-to-consumer contract (not negotiated by the consumer) is unfair if it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer.  The CJEU ruled that the UCTD, as transposed into Latvian law, applies to the contract between the professional services provider and the athelete because the athlete was not yet engaged in professional sport at the time the contract was signed.  The status of “consumer” must be assessed at the time of the conclusion of the contract.  Consequently, the athlete was a “consumer” within the meaning of the UCTD.  The CJEU ruled that the UCTD applies even if the individual later embarks on a professional career.Continue Reading CJEU Rules on Fairness of Remuneration Clause in Sports Contract

On March 21, 2025, the European Commission announced that the Consumer Protection Cooperation Network (“CPC-N”) had initiated enforcement proceedings against an online gaming company, for allegedly violating EU consumer protection laws and engaging in practices that could pose a particular risk to children.  The gaming company now has one month…

Continue Reading Consumer Watchdogs Turn Their Attention to the Online Gaming Industry

On 12 March, the European Commission responded to the imposition of new U.S. tariffs on EU steel and aluminum imports.  The Commission pledged to implement “swift and proportionate countermeasures on U.S. imports into the EU,” signaling a firm stance while leaving the door open for future negotiations.

Announced Countermeasures under the Enforcement Regulation

The EU’s response is made up of two measures:

  1. The reinstatement of 2018 and 2020 EU additional ad valorem duties on certain U.S. imports (“Old Rebalancing Measures”):  In 2018, the first Trump Administration introduced 25% and 10% tariffs on EU steel and aluminum exports, respectively, under Section 232 of the Trade Expansion Act of 1962.  As a response, the EU adopted a list of additional ad valorem duties on certain U.S. imports.  In 2020, the first Trump Administration extended the tariffs to cover certain steel and aluminum derivative products.  The EU then adopted a broader list of additional ad valorem duties on certain U.S. imports.  Adopted under the Enforcement Regulation, these Old Rebalancing Measures were designed to maximize political pressure on the first Trump Administration to rescind its tariffs.  They were suspended in 2023 following an agreement with the Biden Administration.

    As the suspension of the Old Rebalancing Measures expires automatically on 31 March, the Commission will reimpose them.  These Old Rebalancing Measures cover approximately €8 billion worth of EU imports from the U.S., intended to be proportionate to addressing the economic damage inflicted by the U.S. tariffs, and concern products ranging from boats to bourbon to motorbikes.

  2. New EU measures under Article 5 of the Enforcement Regulation (“New Rebalancing Measures”):  In response to the fresh U.S. tariffs impacting another €18 billion of EU exports, the Commission now plans to roll out new or additional ad valorem duties under Article 5 of the Enforcement Regulation (see the suggested product list).  A stakeholder consultation is open for comment from 12–26 March, gathering input from affected industries.  Following this, the Commission will draft an implementing act and consult Member States through the comitology procedure (as provided by the Enforcement Regulation).  The implementing act is scheduled to take effect mid-April, bringing the total value of U.S. exports potentially impacted by the Old and New Rebalancing Measures to €26 billion.

Continue Reading EU’s Reaction to New U.S. Tariffs on Steel and Aluminum

On March 5, 2025, the European Commission published the Industrial Action Plan for the European Automotive Sector. This plan outlines measures to strengthen the competitiveness of the European automotive industry and to accelerate the transition to zero-emission mobility in the EU.  This plan is the result of the “Strategic Dialogue” that has been taking place in Brussels in the last month between vehicle manufacturers in the EU and EU officials.  The plan announces a catalogue of initiatives to be adopted by the Commission, but the expected timelines and the interplay between different initiatives is not always clear.  This blog summarizes some of the initiatives likely to be relevant to stakeholders in the EU automotive industry—particularly those in the electric vehicle (“EV”) supply chain.Continue Reading European Commission Publishes Automotive Industrial Action Plan

On January 29 – 31, 2025, Covington convened authorities from across our practice groups for the Sixth Annual Technology Forum, which explored recent global developments affecting businesses that develop, deploy, and use cutting-edge technologies. Seventeen Covington attorneys discussed global regulatory trends and forecasts relevant to these industries, highlights of which are captured below.  Please click here to access any of the segments from the 2025 Tech Forum.

Day 1: What’s Happening Now in the U.S. & Europe

Early Days of the New U.S. Administration

Covington attorney Holly Fechner and Covington public policy authority Bill Wichterman addressed how the incoming administration has signaled a shift in technology policy, with heightened scrutiny on Big Tech, AI, cryptocurrency, and privacy regulations. A new Executive Order on AI aims to remove barriers to American leadership in AI, while trade controls and outbound investment restrictions seek to strengthen national security in technology-related transactions. Meanwhile, the administration’s approach to decoupling from China is evolving, with stricter protectionist measures replacing prior subsidy-based initiatives.

Cross-Border Investment

Covington attorney Jonathan Wakely discussed the role of ongoing geopolitical tensions in shaping cross-border investment policies, particularly in technology-related transactions. He noted that the Committee on Foreign Investment in the United States (CFIUS) remains aggressive in reviewing deals that could pose China-related risks. The new Outbound Investment Rule introduces restrictions on U.S. persons investing in Chinese companies engaged in certain AI, quantum computing, and semiconductor activities.

Updates on European Tech Regulation

Covington attorneys Sam Choi and Bart Szewczyk explained how, in light of the Draghi Report on European competitiveness and growing geopolitical pressures, the European Commission is planning to focus on “European competitiveness” in this term. The European Commission has announced plans to increase investments into its tech sectors, and find ways to ease the regulatory burden on companies. It is expected that the EU will focus on implementing, and potentially streamlining, its existing tech regulatory regime – rather than adopting new tech regulations that will impose added obligations on companies. The EU already has in place a robust regulatory regime covering privacy, cybersecurity, competition, data sharing, online platforms, and AI. In 2025, the recently adopted AI Act and the Data Act will start to apply, so companies should prepare for their implementation.  Continue Reading Covington Technology Forum Spotlight – The Great Race: Keeping Up as Technology and Regulation Rapidly Evolve

On 23 January 2025, we hosted the 2025 edition of the Covington European Life Sciences Symposium. The Symposium brought together colleagues from London, Brussels, Frankfurt and Dublin with our industry connections to explore the evolving challenges and opportunities facing the European life sciences sector.

Throughout the day our speakers shared their perspectives on a range of legal, regulatory, and business trends, including the evolving regulatory frameworks in the EU and UK; information exchange in ongoing collaboration; investigations and whistleblowing; key ESG topics, and the complexity of options to acquire in pharma deals.

We have set out some of the discussion from the sessions below.

European Life Sciences – The Changing Landscape for Pharma and Biotech

Grant Castle, Head of Covington’s European Life Sciences Regulatory Practice, Peter Bogaert, Marie Doyle-Rossie and Anna Wawrzyniak kicked off with a discussion about the Changing Landscape for Pharma and Biotech.

The UK and EU both aim to deliver access to innovative and transformative medicines and foster international competitiveness in the life sciences industry. Despite the practical challenges faced by the UK Medicines and Healthcare products Regulatory Agency (MHRA) in recent years, it has emerged as an ambitious regulator and is establishing innovative regulatory frameworks, including an international reliance scheme (see our update here), point of care manufacturing regulations, and the relaunch of the Innovative Licensing and Access Pathway (ILAP).

The EU is also pursuing a wave of legislative reform, including wide ranging revisions to the EU’s pharmaceutical legislation, the EU’s supplementary protection certificates (SPC) rules, and proposals for a compulsory licensing scheme.

There can sometimes be a tension between the UK’s and EU’s aims and the practical impacts of regulatory reform, especially in the early stages of implementation.Continue Reading The Covington European Life Sciences Symposium 2025

On 16 January 2025, the European Data Protection Board (“EDPB”) published a position paper, as it had announced last year, on the “interplay between data protection and competition law” (“Position Paper”).

In this blogpost, we outline the EDPB’s position on cooperation between EU data protection authorities (“DPAs”) and competition authorities (“CAs”) in the context of certain key issues at the intersection of data protection and competition law.

Key takeaways

  1. In the interest of coherent regulatory outcomes, the EDPB advocates for increased cooperation between DPAs and CAs.
  2. The Position Paper offers practical suggestions to that end, such as fostering closer personal relationships, mutual understanding, and a shared sense of purpose, as well as more structured mechanisms for regulatory cooperation.
  3. The EDPB is mindful of the Digital Markets Act’s (“DMA”) significance in addressing data protection and competition law risks.

Summary of the Position Paper

The EDPB first outlines certain overlaps between data protection and competition law (e.g., data serving as a parameter of competition). The EDPB argues that as both legal regimes seek to protect individuals and their choices, albeit in different ways, “strengthening the link” between data protection and competition law can “contribute to the protection of individuals and the well-being of consumers”.

The EDPB takes the view that closer cooperation between DPAs and CAs would therefore benefit individuals (and businesses) by improving the consistency and effectiveness of regulatory actions. Moreover, the EDPB emphasises that, based on the EU principle of “sincere cooperation” between regulatory authorities and pursuant to the European Court of Justice’s ruling in Meta v Bundeskartellamt (2023), cooperation between DPAs and CAs would be “in some cases, mandatory and not optional”.Continue Reading EDPB highlights the importance of cooperation between data protection and competition authorities