Google’s Wrist-Slap May Echo For a While

Today’s Agenda

Google’s Wrist-Slap May Echo For a While

Alphabet in the Soup

(Bloomberg Opinion) -- Wrist slaps may not hurt much, but they can still do damage.

The European Commission fined Alphabet Inc.’s Google today over the way it bundles apps on Android phones. The Internet search behemoth must pay $5 billion and has 90 days to come up with a plan to change its ways. This is hardly devastating for Alphabet, notes Alex Webb. It has $103 billion in cash and is expected to rake in $31 billion in GAAP net income this year. 

And the EU seems to be fighting a war Google has already won, writes Shira Ovide. Android dominates the global phone market, and most Android phones run Google apps – China being the big exception, thanks partly to tighter regulations. The EU may hope to make Europe’s market look more like China’s, Shira suggests, but that horse long ago fled the barn.

Both Shira and Alex weigh today’s action against the EU’s 2000s tussle with Microsoft Corp. By itself, this one doesn’t seem nearly as bad. But as Alex has written, regulators in underserved emerging markets such as India may follow the EU’s lead in getting tough with Google – and those markets are where all the growth is. 

And Shira argues Microsoft was so skittish after its EU scrap that it missed out on the mobile revolution that helped the Googles of the world flourish. If Google follows the same path, then the EU’s slap might leave a real mark.

Two Three-Letter Words = A New Fed 

Federal Reserve Chairman Jerome Powell ended two days of congressional testimony and Q&A today, in which he said many words and had many words said back at him. But the two most important words spoken were probably “for now” – the qualifier Powell added to his promise to keep slowly raising interest rates. Tim Duy suggests this is a warning to markets they can’t expect to just sit back with a Fed on cruise control for much longer. Dan Moss says this shift puts Powell’s stamp on the Fed once and for all.

Here Come the Judges

You probably have no idea what an administrative law judge is. But they may well be on their way toward quietly tearing up all manner of regulations, warn Bloomberg’s editors. ALJs, as all the cool kids call them, handle cases at various regulatory agencies such as the Securities and Exchange Commission. Until now, they’ve been hired by career government functionaries, but the Supreme Court recently decided agency heads should pick ALJs instead. Agency heads are political appointees, of course, and the worry is that the Trump administration – whose Justice Department argued in favor of overturning the old ALJ system – or a future administration from either party will use these judges to advance political agendas. Click here to read the whole thing.

An Oil Shock Smells Like That to Some People

Speaking of obscure things with potentially big consequences: sulfur. David Fickling writes the shipping industry is about to switch to a higher fuel standard in order to belch less sulfur into the atmosphere. This is good for the environment. But it also means higher-quality crude oil, which has less sulfur (making it “sweet” instead of “sour,” in oil-market lingo), will be in much higher demand. And according to economics, that means the price of the kind of high-quality oil that ends up as gasoline and jet fuel and such will be higher. You see where all this is going

An oil shock would curb demand, which would devastate oil producers for a while. That may be just a taste (or a hastening?) of the day when oil production and demand peak – currently expected to hit around the year 2030. Liam Denning looks at some long-term forecasts for oil and sees this will mean quite a lot of crude gets left in the ground – and much of it will belong to OPEC. The cartel can no longer assume its ocean of oil will just keep getting more valuable.

One Big Risk of Attacking China’s Trade

Let's assume for the sake of argument that, as President Donald Trump claims, trade wars are easy to win. Some people believe this is certainly true for the U.S. in its war with China. America imports much more, after all, giving it more tit-for-tat tariff ammo. But Anne Stevenson-Yang warns too much pressure on Chinese trade could spark a debt crisis, which would have ripple effects around the world – including the U.S. 

More Trade-War Dispatches: 

Chart Attack

Trump’s tax cuts were supposed to accelerate wage growth. They haven’t, writes Noah Smith.

Google’s Wrist-Slap May Echo For a While

While rival Goldman Sachs Group Inc. tightens its wallet, Morgan Stanley is still a big spender, notes Stephen Gandel.

Google’s Wrist-Slap May Echo For a While

The restaurant industry needs to jump on the online-delivery bandwagon tout de suite, writes Sarah Halzack.

Google’s Wrist-Slap May Echo For a While

Speed Reading

Puerto Rico may be an impoverished, hurricane-ravaged husk, but hedge funds thought they could still squeeze some blood out of it. That may have been a mistake (not to mention amoral). – Joe Nocera

End-of-life care isn’t as expensive as it’s made out to be. – Peter Orszag

Target-date funds aren’t cure-alls for retirement. – Nir Kaissar

Barack Obama and Jeff Bezos could help sell universal basic income. – Leonid Bershidsky

NATO’s real crisis is in cyberspace – and defense spending alone won’t help. – James Stavridis and Dave Weinstein

Iran needs reform before revolution. – Esfandyar Batmanghelidj

Lynch mobs aren’t WhatsApp’s problem, they’re India’s. – Mihir Sharma

ICYMI

Stocks rose. Trump walked back some of his Helsinki backtrack. Elon Musk became the only CEO in recorded history to tweet the words “sexual act with the mini-sub” while apologizing to a British diver.

Kickers

Everything you need to know about baseball’s trade deadline.

Once upon a time, we had an effective Lyme disease vaccine.

There could be more water in Earth’s mantle than in all its oceans.

Every back copy of Galaxy (the sci-fi magazine) is available for free online.

Note: Please send baseball trades, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

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Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.

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