LONDON — The Mayor of London Sadiq Khan and U.S. tech company Palantir have agreed to drop legal proceedings relating to a blocked £50 million police contract.

Palantir brought a claim against the Mayor’s Office for Policing and Crime in the High Court in June after Khan’s deputy mayor refused to sign off on the £50 million contract with the Metropolitan Police for the provision of an AI and data analysis service.

In July, lawyers working on behalf of MOPAC in turn accused the Met Police and Palantir of coordinating to fix the outcome of the procurement process in breach of the rules. Palantir claimed Khan’s office had unlawfully blocked the contract over the company’s “values and ethics,” based on media reporting.

A full trial was expected in January but on Wednesday both sides agreed to “settle their differences” and drop the allegations without admitting liability. They will each cover their own legal costs.

In an agreed statement, the two sides said MOPAC’s decision to block the Palantir contract was “not based on Palantir’s values or ethics or any wider reporting about the company,” though MOPAC said it “recognizes Palantir’s concerns that media reporting of a statement from the Mayor’s spokesperson before the decision was taken could have incorrectly created the impression that an assessment of the company’s values had been a factor in that decision.”

“MOPAC’s consideration was based upon its statutory role of examining spend proposals, against the appropriate legal tests and the relevant guidance on procurement, governance, affordability and ensuring value for money for Londoners and in doing so it focussed on the available information at the time,” the statement said.

The settlement also notes that MOPAC is working with Metropolitan Police Service to re-run a competitive procurement for the relevant service, which Palantir will be eligible to bid for.

“MOPAC does not have, and has never had, any policy of not contracting with Palantir,” the statement confirms, while noting the mayor’s duty is to ensure “all procurements are lawful, fair, transparent and deliver value for money.”

“London is the technology capital of Europe, and I am proud that leading software firms choose the city as their home. Palantir makes a significant contribution to jobs and investment in the capital, employing a large number of Londoners whose services have been procured legally by organizations across the U.K. and beyond,” Khan said.

European Defense Commissioner Andrius Kubilius urged EU countries to keep defense spending high in the EU’s next long-term budget — or face delays in the bloc’s military ramp up.

“Please support the next [multi-annual financial framework] defense lines,” he said, speaking at POLITICO’s European Resilience Summit. Otherwise, he added, “we shall have less possibilities to build the defense systems we need to have, or to build our infrastructure in space. That’s very clear.”

His comments come as EU leaders are set meet Thursday to discuss the EU’s next long-term budget from 2028 to 2034. Over the weekend, the Council of the EU’s Irish presidency proposed cutting the Commission’s original proposal by around 8% to appease a German-led camp demanding major cuts. The cuts overwhelmingly affect EU-wide priorities such as competitiveness, defense and foreign aid.

Earlier this week, national delegations watered down a commitment to secure a deal on the budget by the end of the year.

EU money is key to “incentivize member states to go together for joint procurement, for joint development, for European development,” the former Lithuanian prime minister argued. That’s especially needed as defense spending remains too national-oriented and the defense industry too fragmented, he lamented.

“If we have less of those possibilities to incentivize member states, we shall not be able to change that situation, which is now really still not at the level we need in terms of defragmentation of European development,” the commissioner said.

BRUSSELS — The EU and China are in a good place to talk after last week’s trade deal on hybrid cars, but challenges remain, panelists at POLITICO’s European Resilience Summit on Wednesday agreed.

“From the Chinese business perspective this is very welcome,” said Linlin Liang of the China Chamber of Commerce to the EU, calling the understanding reached in Beijing “quite balanced from our perspective.”

An agreement to halve China’s exports hybrid vehicles to Europe was the main deliverable brought home by Trade Commissioner Maroš Šefčovič.

The two sides said in a joint statement that they would keep talking about issues such as market access for medical devices and the Foreign Subsidies Regulation, an EU measure that scrutinizes foreign subsidies that distort competition in public procurement and corporate acquisitions.

Šefčovič will hold further talks with Chinese Commerce Minister Wang Wentao in January, and they will meet again in March, as he pushes to rein in a €1 billion-a-day bilateral trade deficit.

Liang said Beijing stands ready to act if further talks go off track.

“I would like to remind all what MOFCOM mentioned: that they reserve the right to retaliate in case that things … don’t go around as agreed,” she told the panel on Europe in global trade, referring to the Chinese Ministry of Commerce.

Kathleen Van Brempt, a Belgian MEP for the Socialists & Democrats, said the most important outcome of last week’s Beijing talks was that there was “some sort of trade deal or result.”

Yet Beijing’s aggressive subsidy policies remain a hurdle, the senior trade lawmaker said, referring to a widely cited OECD study which found that Beijing’s subsidies to industry are up to eight times higher than in other countries: “It’s not normal,” she said.

Liang said that China’s export success should not be attributed solely to subsidies, and was the result of “decades of investment in innovation.”

She also said there was “a super appetite” among Chinese businesses to invest in Europe, but that they needed to assess the profitability of the EU market just like European companies.

The discussion also revealed differences between policymakers and businesses over the EU’s proposed Industrial Accelerator Act, a flagship measure aimed at steering public procurement spending toward European companies in sectors ranging from renewable energy to steel and the automotive industry.

Van Brempt, the S&D group’s lead lawmaker on the file in the trade committee, said the parliament’s three co-leads are aligned on the bill. While the center-right European People’s Party was “very divided” over the measure, she said lawmakers should be able to come to a common position.

The bill’s “Made in Europe” provision is a cause for concern for industry, meanwhile, as it risks isolating the EU from global supply chains.

“I would be careful always saying, okay, localize, put fences up,” said Holger Weintritt of German pharmaceutical company Bayer. “Let’s make sure that we still remain globally connected and look for reliable partnerships instead of isolating ourselves .”

PARIS — A deal between France and Germany to strengthen protections in the Industrial Accelerator Act in exchange for a loosening of combustion engine rules should be finalized “in the next few hours or in the next few days,” the bloc’s industry chief Stéphane Séjourné said Tuesday.

Speaking at POLITICO’s Competitiveness Summit in Paris, Séjourné said he hoped the agreement would help “break the deadlock, particularly in the European Parliament” on the IAA.

Séjourné’s comments come a day after French President Emmanuel Macron said a grand bargain with Germany was “imminent.”

The French commissioner said he was open to more “flexibility” on the combustion engine ban and emission rules — so long as decarbonization targets are not fully abandoned — if that helps to unlock talks on the IAA.

“This agreement, in fact, is a European agreement, and that is why it is so important. It should make it possible to green-light the IAA,” Séjourné added.

POLITICO revealed the Franco–German bargain in July. Séjourné is hoping the agreement will ease tensions in the European Parliament, where a minority of lawmakers from the center-right European People’s Party — mostly from the German delegation — have sought to reject or substantially weaken the proposal.

The IAA dispute lies between supporters of an opt-in system — where trading partners would need to qualify before receiving preferential treatment on the European market — and backers of an opt-out system in which the EU would move to exclude partners that fail reciprocity or other conditions. Many of those who back the opt-out option are German EPP lawmakers.

Séjourné called the debate irrelevant, stressing that what matters most is reciprocity with countries the EU works with.

“European public funds should be used primarily for public procurement,” he said. “Our goal is to keep production running smoothly, so we can’t expand the scope of Made in Europe indefinitely if our goal is to manufacture in Europe.”

On the EU’s broader trade policy, Séjourné stressed the need for Europe to continue to build credible “trade defense instruments” while arguing that China “rightly believes that they won their power struggle with the Trump administration a year ago on trade.”

Séjourné was also asked for his thoughts on a member country unilaterally cutting its contribution to the EU, as proposed by the far-right front runner for next year’s presidential election in France, Marine Le Pen — a move he said would be akin to leaving the bloc.

“I don’t know of any gym member who goes to the gym and doesn’t pay their membership fee to gain access,” he said.