Oct 28 (Reuters) – Amazon.com Inc’s (AMZN.O) shares fell about 8% on Friday after forecasting holiday-quarter sales below Wall Street estimates, while its Big Tech peers recovered from a bruising selloff this week.
The online retailer, whose market cap briefly fell below $1 trillion, was last down 8.4% at $101.66, after hitting its lowest since April 2020.
Apple Inc (AAPL.O), however, shone bright amid a crowd of dimming lights in the Big Tech space, as the iPhone maker reported revenue and profit that topped analysts’ estimates.
Microsoft, Alphabet and Meta gained between 1.2% and 3.1% after their shares were battered this week following gloomy outlook from the companies.
The Big Tech stocks are on track to lose more than $400 billion this week.
Many view the megacap companies as bellwethers for how corporate America is faring during a year in which inflation has soared, pushing the U.S. Federal Reserve to enact a series of jumbo-sized rate hikes that have bruised markets.
The Amazon logo is seen outside its JFK8 distribution center in Staten Island, New York, U.S. November 25, 2020. REUTERS/Brendan McDermid
Analysts fear macroeconomic factors, including a strong dollar, will continue to hit Amazon in the near term, however, over a longer period of time, the retailer should be able to bounce back.
“Despite accelerating revenues, Amazon has been cut down to size by the market after missing expectations. Efficiency has yet to return to the e-commerce business,” Ben Barringer, equity research analyst at Quilter Cheviot, said.
While the cloud services segment has been one of high and sustained growth for tech companies, indications for Amazon, Microsoft and Intel Corp (INTC.O) this week point to lower investments as costs rise.
Intel’s shares rose about 7% after the chipmaker said its cost-reduction plan includes layoffs and is expected to lower costs by $3 billion next year.
However, analysts are cautious of how the company plans to cut costs.
Cost reductions are necessary, but Intel needs to focus on cutting spending in the right places and keep research and development investments high, Glenn O’Donnell, research director at Forrester, said.
Reporting by Akash Sriram, Medha Singh, Sruthi Sankar and Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta
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Oct 25 (Reuters) – Adidas AG (ADSGn.DE) is immediately terminating its partnership with Kanye West, the sporting goods maker said on Tuesday, reacting to a rash of offensive behaviour from the American rapper and designer.
The decision comes after Adidas put the tie-up, which has produced several hot-selling Yeezy branded sneakers, under review earlier this month following its efforts to privately resolve the issue.
“Adidas does not tolerate antisemitism and any other sort of hate speech,” the German company said.
“Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness,” it said, referring to the rapper by his legal name.
A lawyer representing Ye did not respond to a request for comment.
Ending the partnership and the production of Yeezy branded products, as well as stopping all payments to Ye and his companies, will “have a short-term negative impact” of up to 250 million euros ($248.90 million)” on Adidas’ net income this year, the company said.
Ye has courted controversy in recent months by publicly ending major corporate tie-ups and due to outbursts on social media against other celebrities. His Twitter and Instagram accounts were restricted, with the social media platforms removing some of his online posts that users condemned as antisemitic.
In now-deleted Instagram posts from earlier this year, the multiple Grammy award-winning artist accused Adidas and U.S. apparel retailer Gap Inc (GPS.N) of failing to build contractually promised permanent stores for products from his Yeezy fashion line.
He also accused Adidas of stealing his designs for its own products.
[1/3] Singer Kanye West walks past models after presenting his Fall/Winter 2015 partnership line with Adidas at New York Fashion Week February 12, 2015. REUTERS/Lucas Jackson/File Photo
On Tuesday, Gap, which had ended its partnership with Ye in September, said it was taking immediate steps to remove Yeezy Gap products from its stores and that it had shut down YeezyGap.com.
“Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values,” Gap said in a statement. The company was selling existing Yeezy Gap stocks until the sell-off period.
European fashion house Balenciaga has also cut ties with Ye, according to media reports.
“The saga of Ye … underlines the importance of vetting celebrities thoroughly and avoiding those who are overly controversial or unstable,” said Neil Saunders, managing director of GlobalData.
Adidas poached Ye from rival Nike Inc (NKE.N) in 2013 and agreed to a new long-term partnership in 2016 in what the company then called “the most significant partnership created between a non-athlete and a sports brand.”
The tie-up helped the German brand close the gap with Nike in the U.S. market.
Yeezy sneakers, which cost between $200 and $700, generate about 1.5 billion euros ($1.47 billion) in annual sales for Adidas, making up a little over 7% of its total revenue, according to estimates from Telsey Advisory Group.
Shares in Adidas, which cut its full-year forecast last week, closed down 3.2%. The group said it would provide more information as part of its upcoming Q3 earnings announcement on Nov. 9.
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Reporting by Mrinmay Dey, Uday Sampath and Aishwarya Venugopal in Bengaluru; Editing by Tomasz Janowski, Sriraj Kalluvila, Bernadette Baum and Anil D’Silva
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Dollar buffeted vs yen by suspected BOJ intervention
European shares rise ahead of earnings-packed week
China GDP beats forecasts but retail sales disappoint
Pound gains as Sunak emerges as front-runner for PM
LONDON/SYDNEY, Oct 24 (Reuters) – The dollar weathered another suspected blast of Japanese intervention to rise against the yen on Monday, while European markets got a lift from hopes that U.S. interest rates could rise more slowly than previously thought.
The dollar roared to 149.70 yen in early trade before hastily retreating to 145.28 in a matter of minutes in what traders and analysts said appeared to be at the hands of the Bank of Japan. It was last down almost 1% at 149.24.
The Financial Times reported the BOJ may have sold at least $30 billion on Friday to try to protect the yen from yet more weakness, which has sharply lifted the cost of Japan’s imports, particularly for resources.
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Japanese authorities again declined to confirm whether they had intervened, but the price action suggested they had.
Any action to support the yen runs counter to the BOJ’s commitment to controlling Japanese government borrowing costs and could increase the pressure on it to step back on yield curve control at its policy meeting this week.
Sterling, meanwhile, see-sawed in volatile trade on news Boris Johnson had dropped out of the running for British prime minister.
Former finance minister Rishi Sunak, who is the market’s preferred candidate, has emerged as the front-runner for the job, which could reduce some of the political uncertainty hanging over the pound.
The news initially saw sterling jump almost a cent to $1.1402, but it could not hold and was last trading at $1.1328 as investors waited for more clarity on the contest. The leadership could potentially be settled later on Monday if Sunak becomes the only candidate to secure the minimum number of MPs’ votes required to progress.
“The day-to-day is tricky. My favourite expression on all of it this morning is this is a time to be a poker player, not a chess player. It’s all about positioning and sentiment and understanding who you’re playing against,” Societe Generale strategist Kit Juckes said.
Equities mostly extended the bounce that began late in New York on Friday on talk the Federal Reserve was debating when to slow the pace of hikes and might signal a step back at its November meeting.
Markets are still priced for a rise of 75 basis points next month, but have scaled back bets on a matching move in December. The peak for rates has also edged down to around 4.87%, from above 5% early last week.
ECB, BoC SET TO HIKE
Stocks in Europe opened on an upbeat note, with the STOXX 600 up 0.7% on the day, ahead of a week of packed earnings, as 118 companies, including big guns like HSBC (HSBA.L), Unilever (ULVR.L) and TotalEnergies (TTEF.PA) are set to report.
Chinese blue chips (.CSI300) slid almost 3%, while the offshore yuan hit another record low against the dollar after Xi Jinping secured a precedent-breaking third leadership term, picking a top governing body stacked with loyalists. Xi is likely to stick to his zero-COVID policy that is damaging growth, analysts say.
Delayed data on gross domestic product(GDP) showed the Chinese economy grew 3.9% in the third quarter, above forecasts for 3.5%, but retail sales disappointed, with a rise of 2.5%.
Markets now await figures on U.S. GDP due on Thursday and core inflation measures the day after. The economy is forecast to have grown an annualised 2.1% in the third quarter, while the Atlanta Fed GDP Now indicator rose to 2.9% in the latest week, from 2.8%.
Sentiment will also be tested by some major earnings with Apple (AAPL.O), Microsoft (MSFT.O), Google-parent Alphabet (GOOGL.O) and Amazon (AMZN.O) all reporting.
The European Central Bank meets this week and is widely expected to raise its rates by 75 basis points, though it is less clear whether it will signal a further such move in December.
“Although we do not expect any ‘dovish’ policy signal, we maintain a bias towards a lower rate path than currently priced by markets,” said analysts at NatWest Markets in a note.
“We forecast +50bp in December and +25bp in early 2023 to a 2.25% peak,” they added. “There is more uncertainty around QT (quantitative tightening), where beginning sales in Q1 2023 could well be announced.”
The euro was off a fraction at $0.9835 , having briefly been as high as $0.9899 early in the session.
The Bank of Canada is also expected to tighten by 75 basis pointsat its meeting this week.
The possibility of a slowdown in U.S. rate increases helped bonds pare some of their recent heavy losses, with U.S. 10-year Treasury yields easing to 4.16% compared to a 15-year peak of 4.337% on Friday.
In commodity markets, gold was sidelined at $1,654 an ounce .
Oil prices surrendered early gains following soft data on Chinese demand. Brent retreated 42 cents to $93.08 a barrel, while U.S. crude fell 41 cents to $84.64.
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Reporting by Wayne Cole; Editing by Jacqueline Wong, Christopher Cushing and Susan Fenton
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Some Fed officials show desire to slow down hikes – WSJ
Alphabet, Twitter, Meta fall after Snap’s ad warning
AmEx down, braces for tougher macro with reserve build
Verizon Communications Q3 profit slumps on subscriber loss
Indexes up: Dow 1.47%, S&P 1.27%, Nasdaq 1.04%
Oct 21 (Reuters) – The S&P 500 and the Dow rose on Friday after a report said the U.S. Federal Reserve will likely debate on signaling plans for a smaller interest rate hike in December, while declines in social media firms capped gains on the Nasdaq.
Some Fed officials have begun sounding out their desire to slow down the pace of increases soon, according to the Wall Street Journal, and how to signal plans to approve a smaller increase in December.
“I would say that the Fed now is looking at easing up on the magnitude or slowing its rate hikes, which underscores its price stability campaign,” said Joe Brusuelas, chief economist at RSM, a U.S.-based consulting firm.
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Stock markets have been hammered by worries of aggressive rate-hiking cycle tipping the U.S. economy into a recession, with the benchmark 10-year U.S. Treasury yield hitting fresh 15-year highs earlier in the session.
Traders are still widely expecting a fourth 75-basis-point hike at the central bank’s November meeting. FEDWATCH
The report helped markets recoup declines from earlier in the session when Snap Inc (SNAP.N) plummeted 30.86% after posting its slowest quarterly revenue growth in five years as advertisers cut spending due to inflation and geopolitical woes.
Other companies that rely heavily on ad revenue such as Alphabet Inc (GOOGL.O) and Meta Platforms Inc (META.O) fell 0.20% and 2.52%, respectively, pushing the S&P 500 communication services sector index (.SPLRCL) down 0.55%.
“It’s not uncommon for companies to cut back on advertising spending during concerns of an economic slowdown,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
“Right now you don’t want to be in a Snap or a Meta, and it’s probably going to transfer over to Alphabet.”
At 12:00 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 444.56 points, or 1.47%, at 30,778.15, the S&P 500 (.SPX) was up 46.56 points, or 1.27%, at 3,712.34.
The Nasdaq Composite (.IXIC) was up 110.56 points, or 1.04%, at 10,725.41.
The third-quarter reporting season so far has been better-than-feared, prompting analysts to raise earnings expectations for S&P 500 companies to a 3.1% increase from 2.8% earlier in the week, according to Refinitiv data.
It is still well below the 11.1% rise that was forecast at the start of July.
Following the earnings-driven gains from earlier this week, the S&P 500 and the Nasdaq are set for their best week in six, while the Dow eyed its biggest weekly gain since late June.
Verizon Communications Inc shed 5.27% as its profit slid 23% and the carrier missed estimates for wireless subscriber additions.
American Express (AXP.N) fell 5.66% after it built bigger provisions to prepare for potential defaults as an economic downturn looms.
Schlumberger (SLB.N) rose 9.2%, pulling the S&P 500 energy sector up 2.2%, on reporting a quarterly profit above expectations.
Advancing issues outnumbered decliners for a 1.62-to-1 ratio on the NYSE and a 1.39-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and 32 new lows, while the Nasdaq recorded 25 new highs and 252 new lows.
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Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Anil D’Silva, Arun Koyyur and Shounak Dasgupta
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Oct 12 (Reuters) – Alphabet Inc’s (GOOGL.O) Google has approved former U.S. President Donald Trump’s social media app Truth Social for distribution in the Google Play Store, a company spokesperson said on Wednesday.
Trump Media & Technology Group (TMTG), which operates Truth Social, is expected to make the app available in the Play Store shortly, Google said.
“It’s been a pleasure to work with Google, and we’re glad they helped us to finally bring Truth Social to all Americans, regardless of what device they use,” TMTG’s Chief Executive Officer Devin Nunes said in a statement.
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Truth Social, which launched in the United States in the Apple App Store in February, had not previously been available in the Play Store due to insufficient content moderation, according to a Google spokesperson in August. Google had expressed concerns to Truth Social about violations of its Play Store policies prohibiting content like physical threats and incitement to violence.
Without Google and Apple stores, there is no easy way for most smartphone users to download Truth Social.
Google’s Play Store is the main way users of Android phones in the United States download apps. Android users can get apps through competing stores or download them directly from a website, though it often requires extra steps and security permissions. Truth Social has been available through those means even as Google blocked it from the Play Store.
Android phones comprise about 40% of the U.S. smartphone market.
Truth Social restored Trump’s presence on social media more than a year after he was banned from Twitter Inc (TWTR.N), Facebook (META.O) and Alphabet Inc (GOOGL.O)’s YouTube following the Jan. 6, 2021 U.S. Capitol riots, after he was accused of posting messages inciting violence.
TMTG has pledged to deliver an “engaging and censorship-free experience” on Truth Social, appealing to a base that feels its views around such hot-button topics such as the outcome of the 2020 presidential election have been scrubbed from mainstream tech platforms.
News of Google’s approval was first reported by Axios.
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Reporting by Helen Coster in New York; Additional reporting by Paresh Dave in Oakland, Anirudh Saligrama and Bhanvi Satija in Bengaluru; Editing by Shounak Dasgupta, Deepa Babington, Marguerita Choy and Sherry Jacob-Phillips
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Twitter jumps on news Musk to resume buyout at $54.20/share
Rivian gains on reaffirming FY deliveries view; lifts peers
U.S. job openings post biggest drop in 2.5 years in August
Indexes up: Dow 2.35%, S&P 2.61%, Nasdaq 2.93%
Oct 4 (Reuters) – Wall Street rallied for a second straight day on Tuesday after softer U.S. economic data led Treasury yields lower and Australia’s central bank raised interest rates less than expected, providing hope that the Federal Reserve would soon temper its aggressive rate hikes.
While labor demand remains fairly strong, U.S. job openings fell by the most in nearly 2-1/2 years in August in another sign the Fed might ease on its mission to tame inflation by tightening policy. read more
Earlier, the Reserve Bank of Australia surprised markets with a smaller-than-expected interest rate hike of 25 basis points. Its cash rate rose to a nine-year peak after six rate hikes in as many months, following similar moves by other central banks. read more
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The RBA is the first major central bank to recognize that now is the time to slow down after aggressively raising rates this year, said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
“There’s hope that the Federal Reserve at some point in the fourth quarter will say the same thing. Not stop raising interest rates, but just slow the pace,” he said. “That’s what the markets kind of rallying on below the surface.”
Still, Fed Gov. Philip Jefferson said inflation is the most serious problem facing the U.S. central bank and it “may take some time” to address. San Francisco Fed President Mary Daly said the central bank needs to deliver more rate hikes. read more read more
Rate-sensitive tech stocks rose as yields on the benchmark 10-year Treasury fell for a second day after the jobs data and RBA’s surprise move. Valuations on tech and other growth stocks are related to the cost of capital.
If gains hold, the Nasdaq Composite index (.IXIC) is set to notch its best single-day performance since July 27, while the Dow Jones Industrial Average (.DJI) and S&P 500 (.SPX) were poised to score their biggest two-day rally since April 2020.
Billionaire Elon Musk proposed going ahead with his original offer of $54.20 to take Twitter Inc (TWTR.N) private, two sources familiar with the matter said on Tuesday, sending the social media firm’s shares surging 12.67%. Tesla shares had been up about 6% before the news and immediately cut gains, up about 2.25% on the day. read more
The megacap titans led the rally, with Amazon.com Inc (AMZN.O) climbing 4.36% and Microsoft Corp (MSFT.O) advancing 2.90%. Apple Inc (AAPL.O) rose 1.90% while Google parent Alphabet Inc (GOOGL.O) 2.62%.
At 2:30 p.m. ET, the Dow Jones Industrial Average (.DJI) rose 667.54 points, or 2.26%, to 30,158.43, the S&P 500 (.SPX) gained 92.64 points, or 2.52%, to 3,771.07 and the Nasdaq Composite (.IXIC) added 306.59 points, or 2.83%, to 11,122.03.
Banks such as Citigroup , Morgan Stanley and Goldman Sachs climbed nearly 5%, boosting the banks index (.SPXBK) by 4%.
The rally was widespread, with less than a dozen of the S&P 500 index trading in negative territory.
The rebound in stocks on Monday followed the S&P 500’s (.SPX) lowest close in nearly two years last week that capped its worst monthly performance in September since March 2020.
Rivian Automotive Inc (RIVN.O) jumped 13.4% after the electric-vehicle maker said it produced 7,363 units in the third quarter, 67% more than the preceding quarter, and maintained its full-year target of 25,000. read more
The S&P 500 posted one new 52-week high and one new low; the Nasdaq Composite recorded 45 new highs and 56 new lows.
(This story has been corrected to say the Australian central bank raised, not cut interest rates, in the first paragraph.)
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Reporting by Medha Singh, Ankika Biswas and Bansari Mayur Kamdar in Bengaluru; Editing by Anil D’Silva, Arun Koyyur, Sriraj Kalluvila and Richard Chang
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Facebook, Google and Twitter logos are seen in this combination photo from Reuters files. REUTERS/File Photo
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Sept 16 (Reuters) – A U.S. appeals court on Friday upheld a Texas law that bars large social media companies from banning or censoring users based on “viewpoint,” a setback for technology industry groups that say the measure would turn platforms into bastions of dangerous content.
The largely 2-1 ruling by the 5th U.S. Circuit Court of Appeals, based in New Orleans, sets up the potential for the U.S. Supreme Court to rule on the law, which conservatives and right-wing commentators have said is necessary to prevent “Big Tech” from suppressing their views.
“Today we reject the idea that corporations have a freewheeling First Amendment right to censor what people say,” Judge Andrew Oldham, an appointee of former President Donald Trump, wrote in the ruling.
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The Texas law was passed by the state’s Republican-led legislature and signed by its Republican governor.
The tech groups that challenged the law and were on the losing end of Friday’s ruling include NetChoice and the Computer & Communications Industry Association, which count Meta Platforms’ (META.O) Facebook, Twitter (TWTR.N) and Alphabet Inc’s (GOOGL.O) YouTube as members.
They have sought to preserve rights to regulate user content when they believe it may lead to violence, citing concerns that unregulated platforms will enable extremists such as Nazi supporters, terrorists and hostile foreign governments.
The association on Friday said it disagreed with forcing private companies to give equal treatment to all viewpoints. “‘God Bless America’ and ‘Death to America’ are both viewpoints, and it is unwise and unconstitutional for the state of Texas to compel a private business to treat those the same,” it said in a statement.
Some conservatives have labeled the social media companies’ practices abusive, pointing to Twitter’s permanent suspension of Trump from the platform shortly after the Jan. 6, 2021, attack on the U.S. Capitol by a mob of his supporters. Twitter had cited “the risk of further incitement of violence” as a reason.
The Texas law forbids social media companies with at least 50 million monthly active users from acting to “censor” users based on “viewpoint,” and allows either users or the Texas attorney general to sue to enforce the law.
Texas Attorney General Ken Paxton on Twitter hailed the ruling as “massive victory for the constitution and free speech.”
Because the 5th Circuit ruling conflicts with part of a ruling by the 11th Circuit, the aggrieved parties have a stronger case for petitioning the Supreme Court to hear the matter.
In May, the 11th Circuit, based in Atlanta, found that most of a similar Florida law violates the companies’ free speech rights and cannot be enforced. read more
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Reporting by Daniel Trotta; Editing by Alexia Garamfalvi and Leslie Adler
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Market sees 22% likelihood of a 100 bps rate hike from Fed -CME
Railroad stocks drop amid negotiations to avoid strike
Indexes up: Dow 0.10%, S&P 0.34%, Nasdaq 0.74%
NEW YORK, Sept 14 (Reuters) – Wall Street ended a directionless session higher on Wednesday as an on-target inflation report largely stanched the flow of Tuesday’s sell-off and investors pressed the “pause” button.
All three indexes wavered throughout the day, but ultimately ended in positive territory. They all failed to meaningfully recover ground lost in Tuesday’s carnage, which wrought their largest percentage plunges in more than two years.
“Today is a lick-your-wounds day, after taking body blows yesterday,” said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. “It’s a day of rest and that’s somewhat of a welcome sign.”
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The Labor Department’s producer prices (PPI) data landed close to consensus estimates and provided some relief in the aftermath of Tuesday’s market-rattling CPI print, which came in hotter than expected. read more
“The inflation debate continues and yesterday was a harsh reminder that this a tough battle and the Fed needs to remain aggressive to put a lid on the widespread inflationary prices we’re seeing,” Detrick added.
The PPI report offered reassurance that inflation is indeed on a slow, downward trajectory.
Inflation
But it still has a long way to go before it approaches the Federal Reserve’s average annual 2% inflation target, and while financial markets have fully priced in an interest rate hike of at least 75 basis points at the conclusion of the FOMC’s policy meeting next week, they see a 22% likelihood of a super-sized, 100 basis-point increase, according to CME’s FedWatch tool.
Two-year U.S. Treasury yields, which reflect interest rate expectations, extended Tuesday’s rise.
The size and duration of further interest rate hikes going forward have many market observers concerned over the lagging effects of the Fed’s tightening phase, with some viewing recession as unavoidable.
A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly
The transportation sector (.DJT), seen as a barometer of economic health and which provides a glimpse into the supply side of the inflation picture, was weighed down by rail stocks in the face of a potential strike.
“Does the White House really want rails to shut down and impact supply chains even more, less than two months before midterm elections?” Detrick asked. “We’re optimistic they can keep rails open.”
Railroad operators Union Pacific (UNP.N), Norfolk Southern (NSC.N) and CSX Corp (CSX.O) lost 3.7%, 2.2% and 1.0% respectively, even as Labor Secretary Marty Walsh met with union representatives in Washington in talks aimed at preventing a rail shutdown. read more
The Dow Jones Industrial Average (.DJI) rose 30.12 points, or 0.1%, to 31,135.09, the S&P 500 (.SPX) gained 13.32 points, or 0.34%, to 3,946.01 and the Nasdaq Composite (.IXIC) added 86.10 points, or 0.74%, to 11,719.68.
Six of the 11 major sectors of the S&P 500 advanced, with energy stocks (.SPNY) leading the gainers with an assist from rising crude prices due to supply concerns.
Starbucks Corp (SBUX.O) shares jumped 5.5% after the company upped its three-year profit and sales outlook. read more
Tesla Inc (TSLA.O) bounced back from Tuesday’s drop, advancing 3.6% on the same day President Joe Biden announced $900 million in funding for electric vehicle charging stations. read more
Advancing issues outnumbered declining ones on the NYSE by a 1.05-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored decliners.
The S&P 500 posted 2 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 26 new highs and 219 new lows.
Volume on U.S. exchanges was 10.90 billion shares, compared with the 10.33 billion average over the last 20 trading days.
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Reporting by Stephen Culp in New York
Additonal reporting by Ankika Biswas, Devik Jain and Sruthi Shankar in Bangalore
Editing by Matthew Lewis
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LUXEMBOURG, Sept 14 (Reuters) – Google suffered one of its biggest setbacks on Wednesday when a top European court upheld a ruling that it broke competition rules and fined it a record 4.1 billion euros, in a move that may encourage other regulators to ratchet up pressure on the U.S. giant.
The unit of U.S. tech giant Alphabet (GOOGL.O) had challenged an EU antitrust ruling, but the decision was broadly upheld by Europe’s General Court, with the fine trimmed modestly to 4.125 billion euros ($4.13 billion) from 4.34 billion euros.
Even with the reduction, it was still a record fine for an antitrust violation. The EU antitrust enforcer has fined the world’s most popular internet search engine a total of 8.25 billion euros in three investigations stretching back more than a decade.
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The judgment is set to boost landmark rules aimed at curbing the power of U.S. tech giants that will go into effect next year. read more
“The judgment strengthens the hand of the Commission. It confirms the Commission can use antitrust proceedings as a backstop threat to enforce rapid compliance with digital regulation also known as the DMA,” said Nicolas Petit, professor at European University Institute.
EU antitrust chief Margrethe Vestager did not mince her words.
“This, of course, is really good. Now, we have the second Google judgment and for us, it is really important as it backs our enforcement efforts,” she said.
This is the second court defeat for Google which lost its challenge to a 2.42 billion euro ($2.42 billion) fine last year, the first of a trio of cases.
“The General Court largely confirms the Commission’s decision that Google imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators in order to consolidate the dominant position of its search engine,” the court said.
“In order better to reflect the gravity and duration of the infringement, the General Court considers it appropriate however to impose a fine of 4.125 billion euros on Google, its reasoning differing in certain respects from that of the Commission,” judges said.
Google, which can appeal on matters of law to the EU Court of Justice, Europe’s highest, voiced its disappointment.
“We are disappointed that the Court did not annul the decision in full. Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world,” a spokesperson said.
The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021. REUTERS/Andrew Kelly/File Photo
ANTITRUST BOOST
The ruling is a boost for Vestager after the General Court overturned her decisions against Intel (INTC.O) and Qualcomm (QCOM.O) earlier this year.
Vestager has made her crackdown against Big Tech a hallmark of her job, a move which has encouraged regulators in the United States and elsewhere to follow suit.
She is currently investigating Google’s digital advertising business, its Jedi Blue ad deal with Meta (META.O), Apple’s (AAPL.O) App Store rules, Meta’s marketplace and data use and Amazon’s (AMZN.O) online selling and market practices.
The Court agreed with the Commission’s assessment that iPhone maker Apple (AAPL.O) was not in the same market and therefore could not be a competitive constraint against Android.
The court backing could reinforce the EU antitrust watchdog in its investigations into Apple’s business practices in the music streaming market, which the regulator says Apple dominates.
FairSearch, whose 2013 complaint triggered the EU case, said the judgment may lead to more competition in the smartphone market.
“This shows the European Commission got it right. Google can no longer impose its will on phone makers. Now they may open their devices to competition in search and other services, allowing consumers to benefit from increased choice,” its lawyer Thomas Vinje said.
The Commission in its 2018 decision said Google used Android to cement its dominance in general internet search via payments to large manufacturers and mobile network operators and restrictions.
Google said it acted like countless other businesses and that such payments and agreements help keep Android a free operating system, criticising the EU decision as out of step with the economic reality of mobile software platforms.
The case is T-604/18 Google vs European Commission.
($1 = 1.0002 euros)
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Reporting by Foo Yun Chee
Editing by David Evans and Bernadette Baum
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The Google name is displayed outside the company’s office in London, Britain, November 1, 2018. REUTERS/Toby Melville/File Photo
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BRUSSELS, Sept 13 (Reuters) – Alphabet unit Google (GOOGL.O) will face damages claims for up to 25 billion euros ($25.4 billion) over its digital advertising practices in two suits to be filed in British and Dutch courts in the coming weeks by a law firm on behalf of publishers.
Google’s adtech has recently drawn scrutiny from antitrust regulators following complaints from publishers. read more
The French competition watchdog imposed a 220-million-euro fine on the company last year while the European Commission and its UK peer are investigating whether Google’s adtech business gives it an unfair advantage over rivals and advertisers. [ read more
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“It is time that Google owns up to its responsibilities and pays back the damages it has caused to this important industry. That is why today we are announcing these actions across two jurisdictions to obtain compensation for EU and UK publishers,” Damien Geradin at law firm Geradin Partners said in a statement on Tuesday.
Google criticised the imminent lawsuits, saying that it works constructively with publishers across Europe.
“This lawsuit is speculative and opportunistic. When we receive the complaint, we’ll fight it vigorously,” a spokesperson said.
The British claim at the UK Competition Appeal Tribunal will seek to recover compensation for all owners of websites carrying banner advertising, including traditional publishers. Britain has an opt-out regime.
The Dutch claim is open to publishers affected by Google’s actions. Litigation funder Harbour is funding both lawsuits.
($1 = 0.9860 euros)
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Reporting by Foo Yun Chee; editing by Philip Blenkinsop and David Evans
Our Standards: The Thomson Reuters Trust Principles.
