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Google’s antitrust setback could change the world of mobile apps yet again

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Epic Games on Monday finally achieved one of its long-standing goals: weakening one of the two major companies behind the modern mobile app ecosystem. A jury found that Google violated antitrust laws by maintaining strict control over its app store, harming the Fortnite maker and other developers.

Google said it would appeal. But the verdict could rewrite the economics of mobile apps — and is a blow to the power of Big Tech.

The backstory: In 2020, Epic encouraged Fortnite players to purchase in-game items directly from the platform to protest Apple and Google’s cuts to all in-app payments through their app store payment systems. The tech giants briefly banned the popular game from their stores, and Epic has sued both.

Apple won its lawsuit in 2021, although that lawsuit was decided by a judge and not a jury. Epic continued its case against Google even after other plaintiffs, such as dating app operator Match, dropped out.

The jury took less than four hours to decide against the search giant. It found that the company violated antitrust laws with both the Play Store and an in-app billing system. It also found that Google had imposed unreasonable restrictions on the competitiveness of other app store operators, including through Project Hug, an initiative that paid developers large sums to keep their apps in the Play Store.

“Free Fortnite!Tim Sweeney, CEO of Epic, posted on the social media platform

Epic wants to open up Google’s devices, not monetary damages. That includes forcing the company to allow other app stores on its Android phones and tablets. Developers may also have new ways to charge users without having to cut corners with Google.

That said, a judge will determine the actual remedies next year. A Google spokesperson said the company would “continue to defend the Android business model.” (It’s unclear what the decision means for Apple, whose case over Epic may go to the Supreme Court.)

It’s a blow to Google as it faces pressure from Washington and beyond. The app store, which accounted for about $12 billion in operating profit in 2021, is only part of the company’s bottom line.

But Google is fighting to protect some of its biggest moneymakers. The country is battling the Justice Department and dozens of states over its search dominance. And it tries to defend its advertising technology business against EU regulators’ efforts to break the divide.

The issue of Donald Trump’s immunity is before the Supreme Court. The justices agreed Monday to investigate whether the former president is protected from prosecution. Jack Smith, the special counsel who prosecuted Trump on charges of conspiring to overturn the 2020 election, made the request ahead of a possible appeals court decision that could delay or sidetrack his case.

Hasbro announces major layoffs two weeks before Christmas. The toy maker behind Monopoly and Magic: The Gathering said it would cut about 1,100 jobs, or nearly 17 percent of its workforce, as toy sales continue to decline since the coronavirus pandemic-induced highs. In addition, EY is reportedly planning to lay off dozens of its American partners in the midst of slowing business.

Choice Hotels is said to be planning a hostile bid for Wyndham. The hotel operator will launch an exchange offer for Wyndham shares and appoint a number of directors to its rival’s board. according to The Wall Street Journal. The move comes after Choice’s previous takeover approach was rejected.

More twists in the story of Shohei Ohtani’s record-breaking contract. The MLB star will issue a reprieve all but $2 million of the $70 million he is owed each year by the Los Angeles Dodgers until his 10-year contract expires, The Athletic reports. The move is intended to help the team navigate the league’s luxury tax.

The latest Consumer Price Index report – due at 8:30 a.m. Eastern – is expected to show little progress in the battle to reduce inflation, raising uncertainty about the Fed’s long-term policy on interest rates.

The numbers to watch: Economists forecast that the headline CPI rose 3.1 percent year-on-year in November, down slightly from October. Core inflation, which excludes volatile items such as food, is expected to come in at 4 percent, showing no improvement from last month’s report.

Wall Street has had to absorb mixed signals about inflation. Last month’s CPI report undercut analyst estimates, sparking a rally in stocks and bonds that pushed the S&P 500 to a 20-month high as investors grew more optimistic that the Fed had finished raising rates. loan costs.

But Friday’s jobs report showed strong hiring and wage gains in November. That could make Fed officials more cautious about their 2024 interest rate outlook.

The central bank is expected to leave its primary interest rate unchanged tomorrow, during the last meeting of the year. But there are many questions about what comes next, making Tuesday’s CPI report an even more important gauge.

On Tuesday morning, traders estimated a roughly 80 percent chance of a rate cut in May. But lowering rates while keeping inflation above the Fed’s 2 percent inflation target could be done detrimental effects on long-term growth.

Investors received hopeful news on Monday. The monthly magazine of the New York Fed inflation research showed respondents are the most optimistic about consumer price developments since April 2021, helped by lower gasoline prices and education costs.

Harvard President Claudine Gay is expected to do so survive the attempts to push her out amid an uproar over her stance on combating anti-Semitism on campus. But new details are emerging about how one of her colleagues lost her job over the controversy.

Major donors to the University of Pennsylvania waged an aggressive and sustained campaign against Liz Magill, the school’s president, and Scott Bok, the chairman of its board of trustees. Magill resigned on Saturday and Bok resigned shortly afterwards.

An activist campaign was waged at Penn. Marc Rowan, the private equity billionaire who chairs the advisory board of Wharton, Penn’s business school, led the efforts in the public and private sectors. Rowan reduced his donations and urged others to do the same — sending Penn’s board a daily email.

As one curator said The Wall Street Journal: “It’s like you’re fighting a proxy battle against your own company.”

The campaign extended beyond Penn. Wall Street bankers threatened to stop doing business with Bok, who was also chairman and CEO of the boutique investment bank Greenhill. Apollo reportedly even tried that thwart the sale of Greenhill to Mizuho of Japan by suggesting that Bok’s leadership at Penn was bad for Greenhill. (The $550 million deal closed just this month.)

Magill’s disastrous House testimony last week was a turning point. By Saturday, Magill and Bok had lost the support of Penn’s board. Several trustees decided that their vice chairman, Julie Platt, and William Lauder, the heir to a cosmetics fortune, should ask Magill and Bok to resign.

Magill and Bok found out and announced their resignations before being sent away.

Big questions remain, including:

  • Is Rowan ready? As Magill’s term ended, Rowan told some Wharton board members that he was wary of continuing to speak out publicly, claiming he was concerned about the perception that he and other donors had helped oust her . But will he be involved in other big decisions, like choosing Penn’s next president?

— David Millsthe Stanford University law professor who led the defense of FTX founder Sam Bankman-Fried as a favor to the crypto entrepreneur’s parents.

The United Nations climate summit in Dubai was due to conclude on Tuesday morning, but a fierce debate over whether fossil fuels should be phased out has brought negotiators to the brink of no-deal.

A draft proposal was labeled a “death sentence.” It calls for cuts in “consumption and production of fossil fuels” by 2050. But that doesn’t go far enough for some governments, including the European Union and some island nations vulnerable to rising sea levels. “The Republic of the Marshall Islands did not come here to sign our death warrant,” said a minister from the Pacific country.

The proposed deal confirmed the worst fears of climate activists, green investors and scientists. who were skeptical that an event in an oil-dependent country would yield meaningful progress in reducing fossil fuel use. Al Gore, the former vice president, said Monday that the draft agreement read “as if OPEC were dictating it word for word.” It was “From the Petrostates, by the Petrostates and for the Petrostates,” he said.

The “phasing out camp” wants nothing less than eliminating the use of fossil fuels, to limit global warming to 1.5 to 2 degrees Celsius. But Saudi Arabia and other oil exporting countries strongly oppose such statements in a final agreement, and the draft text seemed more in line with their thinking. For example, reference was made to an ‘orderly’ or ‘just’ reduction in fossil fuels.

The host country is trying to break the impasse. Sultan Al Jaber, the event’s chairman and head of Abu Dhabi’s national oil company, delayed publication of the draft deal while a compromise was sought. But that seemed unlikely on Tuesday.

The summit has made some progress. Call to triple renewables as an energy source by 2030 are welcomed by countries and business leaders. There have also been major commitments to boost nuclear energy capacity, but there are skeptics stay on your guard.

Offers

  • Investment company General Atlantic did this submitted confidentially for an IPO, DealBook has confirmed, although a move to the stock market is far from imminent. (DealBook, Bloomberg)

  • Private equity giant KKR is reportedly close to a deal buy half of Cotiviti, a healthcare technology company, with a valuation of up to $11 billion. (Bloomberg)

Policy

  • Emmanuel Macron, the French president, warned that the European Union’s AI law could hurt European artificial intelligence companies. ability to compete against global rivals. (FT)

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