Apple, Google crushed in EU ruling

Good morning. Here's what happened overnight and what you need to know today.

1.

Big-tech blow: The European Court of Justice upheld two landmark rulings against Apple and Google, in major wins for the EU's long-standing crackdown on Big Tech. Apple was ordered to repay €13 billion ($21.54 billion) in back taxes to Ireland after it was found to have benefited from unlawful state aid. Google was fined €2.4 billion for abusing its dominant position in search results to favour its own shopping service over competitors. Both rulings are final and cannot be appealed. The rulings further solidify the EU, and Margrethe Vestager, the bloc's competition chief, as the world’s most effective tech industry watchdog. The lengthy appeals process, however, has been criticised for not keeping pace with the rapidly evolving sector. Vestager hailed the decisions as victories for European citizens and tax justice, while spokespeople from both companies expressed their disappointment. (Capital Brief)

2.

Great expectations: JPMorgan Chase shares dropped over 7% on Tuesday, their largest decline in more than four years, after president Daniel Pinto warned investment analysts’ earnings forecasts were too optimistic. Speaking at a conference on Tuesday, Pinto said NII estimates for next year of about USD89.5 billion ($134.63 billion) were unrealistic given expectations for interest rate cuts by the Federal Reserve in coming weeks, Bloomberg reported. Pinto also warned that expectations for 2025 expenses were too optimistic. The cautious outlook sparked a selloff across the banking sector, largely ignoring news the Fed backpedalled on plans for a major increase to capital requirements for big banks after industry pushback. (Capital Brief)(Bloomberg)

3.

REA’s bid: Rupert Murdoch’s real estate listings group REA made an initial takeover proposal to Rightmove that valued the UK’s largest property portal in the low 700 pence-per-share range, Bloomberg reported citing unnamed sources. That would be equivalent to a premium of over 25% compared to Rightmove’s pre-offer price on 30 August, it said. The company has a current market value of £5.3 billion ($10.41 billion). REA, controlled by Rupert Murdoch’s News Corp, last week said it was exploring a potential cash-and-stock offer for Rightmove to bolster its scale in the UK. REA has until 30 September to announce a firm intention to bid. Representatives for both companies declined to comment on the ongoing talks when contacted by Bloomberg. (Bloomberg)

4.

Presidential duel: Kamala Harris and Donald Trump are set to face off in their first (and possibly only) presidential debate in a tight US election campaign. The debate, hosted by ABC in Philadelphia, will begin at 9 pm eastern time (11:00am AEST). Harris is expected to show she can guide the nation past division, while Trump looks to portray her as a California liberal out of touch on key issues like inflation and crime. The debate follows a recent New York Times/Siena College poll showing 28% of voters feel they need more information about Harris and her policies. The same poll shows Trump with a one point lead over Harris, within the margin of error. Former Trump allies Anthony Scaramucci and Olivia Troye, now critics, will attend as Harris’s guests to potentially unsettle Trump, the New York Times reported. (The New York Times)

5.

Ad power: News Corp considered moving away from Google’s advertising tools in 2017 but the Wall Street Journal publisher projected a loss of USD9 million ($13.52 million) in ad revenue if it switched, former executive Stephanie Layser testified in Google's antitrust trial in Virginia. Layser, who worked in ad technology for News Corp from 2017 to 2022, said Google's tools benefited itself more than their publisher clients, describing the company’s dominance as leaving them “hostage.” By the time she left, around 80% of News Corp’s ad transactions used Google’s exchange, Layser said on the second day of a trial, expected to last several weeks. The US Department of Justice is alleging Google monopolised the markets for publisher ad servers, advertiser ad networks and the ad exchanges linking them. Prosecutors want Google to divest its Google Ad Manager if found guilty. Google’s defence claims the market has evolved, with most publishers using multiple ad platforms. (Reuters)

6.

EV tariff tweak: The European Union (EU) plans to reduce the proposed additional tariffs on electric vehicles imported from China, including Tesla models, following new information from automakers, Bloomberg reported, citing unnamed sources. Tesla's tariff is set to be lowered from 9% to just under 8%, according to the sources. The highest tariff for Chinese manufacturers that didn’t cooperate in the EU’s investigation will be reduced to 35.3%, down from 36.3%. The changes, first reported by regulatory news service Mlex, are still under discussion, with more adjustments possible. Member states are scheduled to vote on the tariffs before their November implementation, which will be in addition to the existing 10% duties already imposed on Chinese exporters. (Bloomberg)

7.

Spotlight steal: China’s Huawei unveiled a new tri-foldable smartphone starting at 19,999 yuan ($4,218) just hours after American rival Apple unveiled its new iPhone 16. Huawei said it had 4 million pre-orders for the new AI-powered device, called Mate XT, showcasing its ability to navigate US sanctions and solidifying its lead in the world’s biggest phone market. "Today we bring you a product that everyone can think of but could not make,” Huawei executive director Richard Yu said at the launch. With 27.5% of the global foldable smartphone market, Huawei also leads in China, holding a 42% share, according to research firm IDC. Analysts, however, believe the high price and production constraints will limit its impact on the market. Meanwhile, the iPhone 16 faced criticism from Chinese consumers for its pending AI features, with users questioning its value compared to local alternatives, Reuters reported. (Reuters)

8.

Moscow hit: Ukraine launched its largest drone assault yet on Moscow, killing at least one person and damaging homes in the Moscow region, Reuters reported citing Russian authorities. Nearly 50 flights were diverted as three of Moscow’s airports closed, as Russia downed 20 drones near the capital and another 124 across eight regions. A 46-year-old woman was killed and three people were injured in the Ramenskoye district, southeast of the Kremlin, Moscow regional governor Andrei Vorobyov said. As Russia pushes forward in eastern Ukraine, Kyiv has brought the conflict into Russia with a cross-border assault on the western Kursk region and intensified its drone strikes deeper into Russian territory. (Reuters)