Von der Leyen and Birol discuss how to tackle spiralling energy prices

Good morning. As Iranian missiles streak over the Strait of Hormuz, a 79-year-old Greek billionaire has been steering his ships straight into the turmoil, making George Prokopiou one of just a handful of shipowners willing to brave the journey.

Today, our energy correspondent reports on the crisis talks that will attempt to address Europe’s exposure to the Iran war shock, and our competition correspondent reports on how the EU’s landmark Digital Markets Act is impacting Big Tech.

Have a great weekend.

Cool it

European Commission president Ursula von der Leyen meets the head of the International Energy Agency today, after a week of spiralling energy costs that have underlined the bloc’s exposure to imported fossil fuels, writes Ian Johnston.

Context: IEA chief Fatih Birol’s visit to Brussels to discuss energy prices was in the works well before conflict kicked off in the Middle East, but the subsequent turbulence in energy markets gives the visit added spice.

Today, the college of European commissioners will discuss moves to lower prices and relieve pressure on households and businesses, two people familiar with the matter said.

But Birol, who is attending the meeting as a guest, will also use the occasion to address global energy markets on price shocks that risk sparking inflation across Europe if they persist, another person said.

The huge increase in gas prices this week has raised questions over the bloc’s low gas stocks, which stand at 30 per cent after a particularly cold winter.

High gas prices have also led to huge swings in power prices in the past week and placed renewed scrutiny on Europe’s so-called marginal pricing system, in which electricity prices are set by the most expensive energy source in a given period, often gas.

The rollout of renewables across Europe means prices can be much lower when it is windy and sunny but spike when gas takes over to meet demand. This trend has only been accentuated this week by the gas price surge.

Still, a letter seen by the FT sent by seven energy ministers including from Sweden and Denmark calls on the Commission to stick with the marginal pricing system, arguing that no better alternative exists.

Meanwhile, discussions on efforts to reform Europe’s grid system will also be on the table and could prove equally political.

In a separate letter to von der Leyen seen by the FT, Swedish Prime Minister Ulf Kristersson laid out his opposition to a recently proposed grids package, criticising a power grab by the Commission and saying tinkering around the edges of energy infrastructure would not tackle the need for more reliable supplies.

“Europe needs to build more power production that is able to meet expected demand — every day, all year round,” Kristersson said.

Chart du jour: Demographic shifts

The FT contacted 45 experts to ask what shifting demographic patterns will mean for the global economy in the years to come. Read the full story with interactive charts here.

Incremental benefits

The EU’s landmark Digital Markets Act is beginning to chip away at Big Tech’s dominance and has already delivered some benefits for consumers, the EU’s consumer protection organisation tells Barbara Moens.

Context: For two years, large tech companies such as Apple, Amazon, Google, Meta and Microsoft have had to comply with the bloc’s DMA. The legislation aims to curb Big Tech’s power and level the playing field for smaller rivals, with fines up to 10 per cent of global revenue for those that do not comply.

The rules have been heavily criticised by tech companies, who complain about regulatory over-reach, uncertainty and additional hurdles for European businesses and some consumers. 

But the European Consumer Organisation (BEUC) sees the glass as half full, arguing the DMA has delivered concrete benefits for consumers, such as being able to choose their default browser.

“People can benefit from these wider choices,” said Agustín Reyna of BEUC, adding that they could for instance pick applications with higher privacy settings.

“Of course, markets are not going to change dramatically. But one or two per cent that goes away from Google, it’s huge for a smaller player outside in the market,” Reyna said.

They also point to the ability to create a Google account without requiring a Gmail account, or the ability to make contactless payments on iPhones without going through Apple Pay. 

What to watch today

1. EU justice ministers meet.

2. European Commission president Ursula von der Leyen chairs debate on energy with IEA chief Fatih Birol.

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