Brussels blasts Big Tech

Today’s top stories

• The UN Security Council passed a resolution demanding an immediate ceasefire between Israel and Hamas as well as the immediate and unconditional release of all hostages. The US abstained from the vote, allowing the body to pass its first resolution calling for a ceasefire since the war began in October.

• Boeing chief executive Dave Calhoun is to step down at the end of this year, as part of personnel changes at the US aircraft manufacturer, which is battling with the fallout from an incident in which a plane door blew out mid-flight.

• The US and Japan are planning the biggest upgrade to their security alliance since 1960 in a move to counter China. The plans to restructure the US military command in Japan will be unveiled on April 10.

For up-to-the-minute news updates, visit our live blog

Good evening.

Could this be the day Big Tech finally met its match? 

The EU this morning announced investigations into Apple, Alphabet and Meta in the first applications of its landmark Digital Markets Act. Apple and Google-owner Alphabet were accused of favouring their own app stores while Facebook-owner Meta is being probed over its use of personal data for advertising. If found guilty, companies face fines of up to 10 per cent of global turnover.

The DMA, a sweeping set of rules unveiled in March 2022, aims to keep in check the market power of six “gatekeepers”: Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft. As our Big Read details, it is being closely watched around the world as a test of how the tech giants can be successfully regulated.

West coast editor Richard Waters says the magnitude of the EU’s giant test in micromanagement is hard to overstate. It has been met with deep concern in Silicon Valley, where it is seen as a government attempt to override years of design and technical decisions made by product managers and engineers. Greater user choice may sound fine in theory, they argue, but it will challenge fundamental aspects of how services work.

Today’s moves come a few weeks after the EU fined Apple more than €1.8bn for stifling competition from rival music streaming services in a long-running case dating from 2021. Another brush with Brussels this month ended with Apple allowing apps to be downloaded directly from their developers’ websites for the first time.

Apple is also feeling the heat on the other side of the Atlantic. The US Department of Justice last week announced it was suing the company for allegedly using its power in the smartphone sector to squash competition.   Attorney-general Merrick Garland noted that Apple’s net income — which was $97bn in 2023 — “exceeds the GDP of more than 100 countries”, in large part because of the success of the iPhone.  

Apple until now was one of the few Big Tech companies to avoid major antitrust action in the US, but, says Rana Foroohar in today’s Swamp Notes newsletter (sign up here), the DoJ move could be the “harbinger of a big correction”.

Back in Europe, some are sceptical that Brussels’ actions will have the desired effect. Judging by the record share prices enjoyed by some of these companies in recent months, Wall Street doesn’t believe it either. Not for nothing have Microsoft, Amazon, Meta, Apple and Alphabet — along with chip company Nvidia and electric-car maker Tesla — been dubbed the “Magnificent Seven” for their outsized contribution to stock market returns.

Signs are emerging however that this shareholder exuberance could be peaking. Tech bosses Peter Thiel, Jeff Bezos and Mark Zuckerberg are among those who have sold hundreds of millions of dollars of their companies’ shares this quarter.

Or as one legal expert put it: “If they think that we’re at the top and so they’re getting out, that’s a rather stark signal to everyone else.”

Need to know: UK and Europe economy

The House of Commons was told that China-linked hackers were responsible for a raft of cyber attacks against British MPs and peers, plus a big attack on the Electoral Commission last year.

The French president and EU officials called on Vladimir Putin not to use a terror attack on a Moscow concert hall, which has been claimed by the Isis militant group, as a pretext to expand the war in Ukraine. Four suspects have appeared in court.

Belgian Prime Minister Alexander De Croo told the Financial Times that the EU must wean itself off Russian nuclear fuel “as fast as possible” to stop Moscow using revenues to fund its war chest. Russia’s enriched uranium makes up 30 per cent of EU supply.

Polish central bank chief Adam Glapiński told the FT he was seeking a truce with Prime Minister Donald Tusk after an increasingly bitter feud. Tusk’s new government has claimed that Glapiński abused his powers to try to help the PiS party win last October’s election.

Need to know: global economy

IMF chief Kristalina Georgieva said China was at a “fork in the road” and must choose between past policies and “pro-market reforms” to get growth. Analysts expect the country’s economy to continue to slow in the medium term thanks to the property downturn and demographic decline.

China has introduced new guidelines that will mean US microprocessors from Intel and AMD are phased out of government PCs and servers in its most significant step yet in replacing foreign technology with homegrown solutions. 

Contributing editor Ruchir Sharma says many of the world’s most troubled economies such as Turkey, Argentina, Egypt, Nigeria and Kenya are making great progress with recovery and markets are starting to reward them for it.

A new Big Read looks at how infrastructure has become a favoured area for investment, for example from pension funds looking for yield and protection against market volatility.

China and Russia are challenging US claims to mineral-rich stretches of seabed because Washington has failed to ratify a treaty — the UN Convention on the Law of the Sea — that governs access to resources in international waters.

Need to know: business

Novo Nordisk announced a €1bn deal for a German biotech developing therapies to treat heart disease, as the Danish group seeks to branch out from its blockbuster diabetes and weight loss drugs Ozempic and Wegovy.

American Express Global Business Travel has agreed to buy rival CWT for $570mn in a bet on the continued recovery of business travel. The deal comes amid growing competition and consolidation as the industry looks to move beyond the disruption of the pandemic.

Even as global temperatures smash through record highs, the oil industry is claiming the world can’t afford the rapid transition from fossil fuels to cleaner energy. The green investment backlash led by US Republicans has led to investment funds pulling more than $13bn from BlackRock, the world’s largest asset manager.

Xiaohongshu or “little red book”, China’s answer to Instagram, has made its first profits as advertising and ecommerce revenues ramp up. The business is a rare recent success story in a sector battered by falling valuations and divestments from foreign investors.

Mutual funds have enabled millions to invest in the stock market since they were introduced 100 years ago, but newer, nimbler products are reshaping asset management. A Big Read asks whether they’ve had their day.

The World of Work

Companies are seeking legal help to deal with a surge in neurodiversity claims from staff, a particular problem when employees only mentioned conditions such as autism and ADHD once they were put on some form of performance management plan or facing dismissal.

Persuading employees to speak up when they see something wrong is crucial if companies are to avoid disaster, but there are many pitfalls, including being passed over for promotion or forced out.

Menopause has risen up employers’ agenda as acceptance grows that once-private issues, such as mental health, have an impact on working life. Help is welcome, writes columnist Emma Jacobs, but it must avoid the risk of “meno-washing”.

April marks an important month for workers in the UK with a swath of new rights including carers’ leave and enhanced paternity provision. The Working It newsletter explains what’s coming.

Some good news

A new light-activated antimicrobial that kills all bugs in minutes without generating resistance has been adopted by NHS hospitals for the first time in a bid to reduce surgical infections.

Source: Economy - ft.com