The daily business briefing: July 18, 2018

1. EU hits Google with record $5 billion antitrust fine

European Union regulators on Wednesday hit Google with a record €4.3 billion ($5 billion) fine for antitrust violations. The European Commission said Google abused its Android market dominance by inserting its own search engine and Chrome apps into the widely used operating system for smartphones and tablets. The regulators also said Google did other things to block competition, such as paying "certain large manufacturers and mobile network operators" to exclusively bundle its search app on handheld devices. The fine far surpassed Google's previous $2.7 billion record-breaking fine, which the EU imposed last year, saying Google had manipulated search results. Google parent Alphabet has 90 days to change its business practices or face further penalties.

The Verge BBC News

2. Fed chair tells senators economy's strength justifies more rate hikes

Federal Reserve Chairman Jerome Powell said in a report on monetary policy to Congress on Tuesday that strong economic growth is likely to let the central bank continue its policy of slowly raising interest rates. As the employment picture has brightened and inflation has risen toward a 2 percent target, the Fed has been scaling back on the "extra boost" it gave the economy to help lift it out of the Great Recession, and that process is "running smoothly," Powell said. "Our policies reflect the strong performance of the economy and are intended to help make sure that this trend continues," he told the Senate Banking Committee. Powell did introduce a measure of caution, saying that it was "very troubling" that the percentage of economic growth flowing to workers had fallen. U.S. stock futures struggled for direction early Wednesday ahead of Powell's testimony before a House panel.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

The Associated Press MarketWatch

3. 4 states sue to void cap on state, local tax deductions

New York, Connecticut, Maryland, and New Jersey sued the federal government on Tuesday, seeking to get rid of the $10,000 cap on federal deductions for state and local taxes included in President Trump's 2017 tax overhaul. The Republican-led Congress passed the $1.5 trillion overhaul and Trump signed it seven months ago, slashing the corporate tax rate and mostly reducing taxes for the wealthy. Critics said the cap disproportionately hurts taxpayers in "blue" states that are heavily Democratic, trampling on state sovereignty. "The federal government is hell-bent on using New York as a piggy bank to pay for corporate tax cuts and I will not stand for it," said New York Gov. Andrew Cuomo, a Democrat. A spokeswoman said the Treasury Department was reviewing the complaint.

Reuters

4. Goldman Sachs names David Solomon as next CEO

As Goldman Sachs reported better-than-expected quarterly results on Tuesday, the investment bank named David Solomon to succeed Lloyd Blankfein as its next chief executive officer. Blankfein has led the company since 2006, through the financial crisis. Solomon is a veteran investment banker. He is expected to make a series of management changes to put his own lieutenants into leadership positions. He also will take over responsibility to increase revenue by $5 billion over three years. "Organizations, to move forward, have to evolve, they have to change, they have to adapt," he said in a joint interview with Blankfein on the eve of the announcement.

The New York Times

5. Report: Twitter suspended 58 million accounts in last 3 months of 2017

Twitter suspended at least 58 million user accounts in the final quarter of 2017, The Associated Press reported Tuesday, citing data it had obtained. Twitter has taken a newly aggressive posture toward malicious or suspicious accounts in the backlash over Russian efforts to spread disinformation during the 2016 U.S. presidential campaign. Twitter last week confirmed a report in The Washington Post saying the micro-blogging site had suspended 70 million more accounts in May and June. The intensifying effort has raised speculation that the crackdown could put a dent in Twitter's user growth, a key indicator of social media companies' health. Twitter is already struggling to attract new users in the face of competition from Facebook, Instagram, and other rivals.

The Associated Press The Washington Post