The daily business briefing: July 17, 2019

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1. EU antitrust regulators open Amazon data-use investigation
2. IMF chief Christine Lagarde resigns after ECB nomination
3. U.S. factory sector slumps for 2nd straight quarter
4. Stock futures flat after Trump trade comments snap winning streak
5. IKEA to close only U.S. factory

published 17 July 2019

1. EU antitrust regulators open Amazon data-use investigation

European Union antitrust regulators will investigate Amazon to determine whether its use of independent merchants' data violates rules safeguarding fair competition, the European Commission said Wednesday. Competition Commissioner Margrethe Vestager said the EU's formal investigation will examine how Amazon uses data from sellers on its marketplace. "Based on the commission's preliminary fact-finding, Amazon appears to use competitively sensitive information — about marketplace sellers, their products, and transactions on the marketplace," Vestager said. Amazon, the world's largest retailer, said in a statement that it would "cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow." Earlier on Wednesday, Amazon reached a deal with Germany's antitrust authority to revise its terms of service for third-party sellers.

International Monetary Fund chief Christine Lagarde announced Tuesday that she was resigning. The move came after Lagarde was named earlier in July as the next European Central Bank president. "With greater clarity now on the process for my nomination as ECB president and the time it will take, I have made this decision in the best interest of the fund, as it will expedite the selection process for my successor," Lagarde said. Her nomination to head the ECB still requires approval by the European Council, made up of 28 European heads of state. If confirmed, she will be the first woman to head the ECB since it was formed in 1998 to manage eurozone monetary policy.

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The U.S. manufacturing sector contracted for the second straight quarter in the three months ended in June, the Federal Reserve said Tuesday. Factory production fell by 1.2 percent in the second quarter after declining by 1.9 percent in the first. "The sector is in recession," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "That's not news, it's a consequence of China's cyclical slowdown and the trade war." Economists expect a rough third quarter, too, Shepherdson said, but by the fourth quarter "we think a trade deal will have been done and China's economy will be turning up."

U.S. stock index futures were flat early Wednesday, struggling to shake off skeptical comments on U.S.-China trade tensions by President Trump that dampened investor optimism on Tuesday. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were flat or up by less than 0.1 percent ahead of the next wave of corporate earnings reports. The three main U.S. indexes fell on Tuesday after Trump said the world's two largest economies had a "long way to go" in negotiations to end their costly trade war. The Dow closed 0.1 percent lower on Tuesday, snapping a four-day winning streak. The S&P 500 dropped by 0.3 percent and the Nasdaq fell 0.4 percent after closing at record highs a day earlier as this week's stream of corporate earnings reports got underway.

Swedish furniture company IKEA plans to close its only U.S. factory site in Danville, Virginia, in December, The Wall Street Journal reported Tuesday. IKEA will shift the operations to Europe, cutting about 300 U.S. jobs. IKEA opened the plant in 2008 and makes wood-based products like the KALLAX shelves and BESTA storage units at the 930,000-square-foot facility. "We made every effort to improve and maintain the competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production in Danville, Virginia, for the long-term," plant site manager Bert Eades told the Journal.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.