US considers breakup of Google in landmark search case
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Google is facing the threat of being broken up, as the US government weighs up how to tackle its monopoly in online search.
In a court document filed overnight, the US Department of Justice suggests it could seek ‘structural remedies’ such as forced product sales – to prevent Google using its Chrome browser, Android operating system and Play app store to unfairly dominate the search market. Other, less radical, options are also under consideration, though.
Introducing their case, the DoJ say:
Google’s anticompetitive conduct resulted in interlocking and pernicious harms that present unprecedented complexities in a highly evolving set of markets.
These markets are indispensable to the lives of all Americans, whether as individuals or as business owners, and the importance of effectively unfettering these markets and restoring competition cannot be overstated.
The DoJ’s “proposed remedy framework” comes a month after a US judge ruled that Google had violated antitrust law and created an illegal monopoly. The case centred on Google’s use of exclusive agreements with device makers like Apple and Samsung, in which it paid billions of dollars to make sure that its product was the default search engine on their phones and tablets.
The DoJ argues that the courts must address Google’s unlawful conduct is undoing its effects on search distribution, so rivals can compete for customers fairly.
The court filing says:
Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow.
At this stage, the plaintiffs are only “considering” behavioral and structural remedies – legal-speak for breaking the tech giant up.
Other options include potentially restricting Google from using contracts and “monopoly profits” to control distribution channels and search-related products. Or, Google could be forced to share users’ search data with rivals.
The plaintiffs also want the remedies to be forward-looking; they could include restricting Google from using search results to train new generative artificial intelligence models and products.
They say:
Google’s ability to leverage its monopoly power to feed artificial intelligence features is an emerging barrier to competition and risks further entrenching Google’s dominance.
The Justice Department is expected to file a more detailed proposal with the court by 20 November, Reuters reports, while Google will have a chance to propose its own remedies by 20 December…..
The agenda
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7am BST: German trade data for August
-
10am BST: Post Office chief executive, Nick Read, to give evidence at the Horizon IT inquiry
-
Noon BST: US weekly mortgage approval data
-
2pm BST: Bank of Israel’s interest rate decision
-
3.30pm BST: EIA oil stocks data
Key events
Oil prices are pushing higher again, after sliding yesterday amid talk of a potential ceasefire between Israel and Hezbollah.
Brent crude, the global benchmark, is up 0.5% at $77.55 a barrel, a 37 cent gain, while US light crude has advanced by 0.3% to $73.78 a barrel.
Prices lost more than 4% yesterday but markets are still concerned about a potential Israeli attack on Iran’s oil infrastructure. The selloff came after a rally in oil prices that began after Iran launched a barrage of missiles at Israel on 1 October, culminating in an 8% gain last week, the biggest in more than a year.
Priyanka Sachdeva, senior market analyst at the brokerage Phillip Nova in Sinagpore, said:
The everyday dilemma of ‘Middle Eastern headlines’ moving like a pendulum between ‘ceasefire talks’ and ‘further escalation in attacks’ has been distracting investors from reality.
Oil markets are twirled in sentiments of ‘buying the rumour’ and sidelining the real fundamentals that should matter.
Central bankers in New Zealand have been busy overnight, cutting their key interest rates by half a percentage point.
The Reserve Bank of New Zealand lowered the cash rate to 4.75%, from 5.25%, a move which knocked the New Zealand dollar (known, rather sweetly, as the ‘kiwi’ in FX circles).
The kiwi dollar tumbled 0.9% to $0.6084, the lowest since 19 August.
Antonio Ernesto Di Giacomo, senior market analyst at XS.com, says:
The main objective of this decision is to keep inflation within the target range of 1-3% and stabilize the economy, which has shown signs of weakening in recent months.
This indicates that monetary authorities are willing to take additional measures, if necessary, to support growth.
Google: DOJ’s radical and sweeping proposals risk hurting consumers, businesses, and developers
Google has criticised the DoJ’s proposal, calling them “radical” and arguing they “go far beyond the specific legal issues in this case.”
In a corporate blog post, Lee-Anne Mulholland, Google’s vice president for Regulatory Affairs, claims that the US government is pursuing “a sweeping agenda that will impact numerous industries and products”, rather than simply focusing on the issue of search contracts.
Mulholland argues that:
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Forcing Google to share your search queries, clicks, and results with competitors risks your privacy and security.
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Hampering Google’s AI tools risks holding back American innovation at a critical moment.
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Splitting off Chrome or Android would break them — and many other things
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Changes to the online advertising market would make online ads less valuable for publishers and merchants, and less useful for consumers.
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Unreasonable restrictions on how Google promotes our search engine would create friction for consumers and harm businesses.
You can read the argument here.
Boeing withdraws 30% pay rise offer to striking workers
Also in the US overnight, attempts to end the Boeing workers strike have hit a roadblock – with the company withdrawing its pay rise offer.
Boeing and the union held their latest round of negotiations with federal mediators on Monday and Tuesday, but talks collapsed and the sides were left locked in acrimonious stalemate showing no signs of being resolved anytime soon, a person briefed on the talks said.
Nearly four weeks after the walkout began, no further negotiations were planned between Boeing and union representatives.
Both sides blamed the other for the deadlock.
“Unfortunately, the union did not seriously consider our proposals,” Boeing Commercial Airplanes head Stephanie Pope said in a note to the employees, calling the union’s demands “non-negotiable“.
Pope added:
“Further negotiations do not make sense at this point and our offer has been withdrawn.”
But, the International Association of Machinists and Aerospace Workers union said in a statement that Boeing was “hell-bent on standing on the non-negotiated offer” proposed last month.
The union said:
“They refused to propose any wage increases, vacation/sick leave accrual, progression, ratification bonus, or the 401k Match/SCRC Contribution. They also would not reinstate the defined benefit pension.”
US considers breakup of Google in landmark search case
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Google is facing the threat of being broken up, as the US government weighs up how to tackle its monopoly in online search.
In a court document filed overnight, the US Department of Justice suggests it could seek ‘structural remedies’ such as forced product sales – to prevent Google using its Chrome browser, Android operating system and Play app store to unfairly dominate the search market. Other, less radical, options are also under consideration, though.
Introducing their case, the DoJ say:
Google’s anticompetitive conduct resulted in interlocking and pernicious harms that present unprecedented complexities in a highly evolving set of markets.
These markets are indispensable to the lives of all Americans, whether as individuals or as business owners, and the importance of effectively unfettering these markets and restoring competition cannot be overstated.
The DoJ’s “proposed remedy framework” comes a month after a US judge ruled that Google had violated antitrust law and created an illegal monopoly. The case centred on Google’s use of exclusive agreements with device makers like Apple and Samsung, in which it paid billions of dollars to make sure that its product was the default search engine on their phones and tablets.
The DoJ argues that the courts must address Google’s unlawful conduct is undoing its effects on search distribution, so rivals can compete for customers fairly.
The court filing says:
Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow.
At this stage, the plaintiffs are only “considering” behavioral and structural remedies – legal-speak for breaking the tech giant up.
Other options include potentially restricting Google from using contracts and “monopoly profits” to control distribution channels and search-related products. Or, Google could be forced to share users’ search data with rivals.
The plaintiffs also want the remedies to be forward-looking; they could include restricting Google from using search results to train new generative artificial intelligence models and products.
They say:
Google’s ability to leverage its monopoly power to feed artificial intelligence features is an emerging barrier to competition and risks further entrenching Google’s dominance.
The Justice Department is expected to file a more detailed proposal with the court by 20 November, Reuters reports, while Google will have a chance to propose its own remedies by 20 December…..
The agenda
-
7am BST: German trade data for August
-
10am BST: Post Office chief executive, Nick Read, to give evidence at the Horizon IT inquiry
-
Noon BST: US weekly mortgage approval data
-
2pm BST: Bank of Israel’s interest rate decision
-
3.30pm BST: EIA oil stocks data
