Dozens of US states slam iPhone maker’s restrictive practices
Over 30 US states on Thursday stood by Fortnite video game producer Epic Games as they appealed a ruling in its lawsuit against Apple over restrictive policies on the iPhone maker’s in-app payment system.
“Apple’s conduct has harmed and is harming mobile app-developers and millions of citizens,” the plaintiffs said, according to court papers seen by Reuters.
“Meanwhile, Apple continues to monopolize app distribution and in-app payment solutions for iPhones, stifle competition, and amass supracompetitive profits within the almost trillion-dollar-a-year smartphone industry,” they claimed.
The appeal, filed by the attorneys general for 34 US states and the District of Columbia, follows a 2020 lawsuit accusing Apple of violating antitrust laws by charging Epic Games (and other developers) commissions of 15% to 30% to use its in-app payment system and restricting external payment methods.
A US district judge in Oakland, California ruled in favor of Epic Games in September 2021. Apple was ordered to open up the payment system in its App Store app so developers could offer other payment methods and not have to pay Apple extra fees. However, the judge also ruled that Apple is not an antitrust monopolist in mobile gaming transactions, largely leaving the company to do what it pleases with its developers. Epic Games challenged the ruling in the Ninth US Circuit Court of Appeals last week.
In their appeal in support of Epic Games, the attorneys general said the Oakland court failed to adequately assess the case, noting how it appeared to overlook the non-negotiable contracts that Apple requires game developers to sign, which they see as a clear sign of monopolistic policy.
“Paradoxically, firms with enough market power to unilaterally impose contracts would be protected from antitrust scrutiny – precisely the firms whose activities give the most cause for antitrust concern,” they said.
This is the first time that US state attorneys general have filed an antitrust lawsuit against Apple. Several similar cases have been filed against other tech giants, including Meta Platforms and Google.
Apple’s reply to the appeals is expected in March, and the company said on Thursday it was optimistic that it would be able to overturn them.
Supply shortages and the Ukraine-Russia crisis raise concerns over energy supplies
Global coal prices jumped by over a third in January, edging toward record highs reached in October 2021, due to supply shortages and tensions between Russia and Ukraine. The benchmark Newcastle coal index rose to $262 a ton.
The coal market reacted to a month-long export ban by major supplier Indonesia, which halted deliveries following new domestic market sales regulations at the peak of the European heating season. The ban is due to be lifted on January 31, but experts are uncertain about the volume of coal the markets may expect, with Indonesian authorities saying only miners that have complied with the new laws will be allowed to resume exports.
There are also worries over the outcome of the Russia-Ukraine crisis. The reported increase of Russian troops near Ukraine’s border has been met with outrage in the West, which threatened Moscow with sanctions in the event of a military conflict.
Some experts speculate that Russia may cut off gas supplies to Europe in response to sanctions. If that happens, Europe, which is already short on gas, with the commodity prices nearly doubling in the past months, may start loading up on coal, analysts say. According to data from UK oil and gas giant BP, European utilities have already stepped up imports of coal since mid-2021, after reducing their share of global coal use to 6.2% in 2020 amid a push towards greener energy.
Projections from commodity flows tracking firm Kpler show that Europe is due to import some 5.58 million tons of thermal coal this month, the highest monthly figure since 2019 and over 1 million tons more than the monthly average for 2021 coal imports. If this buying spree continues, coal prices will keep rising, squeezing the market already tight from high demand in two major coal consumers – China and India. Last year’s coal price records were reached because of shortages in these two states amid cold weather and booming post-Covid-19 pandemic industrial demand.
Analysts expect coal prices to retreat in February, as the heating season in the Northern Hemisphere draws to an end, but they claim this could change if Russia halts gas deliveries to Europe or stops coal exports.
Ukraine was once a major producer of coal, with some 50% of the commodity mined in its eastern regions, which broke away in 2014. The two self-proclaimed republics of Donetsk (DNR) and Lugansk (LNR), both on the Russian border, declared independence from Ukraine and remain at a standoff with Kiev. Amid the conflict, many mines had been shut down and coal production dropped. The breakaway republics halted coal shipments to the rest of Ukraine, which forced Kiev to import the commodity for power generation from the US. This is much more expensive due to freight costs, which resulted in a spike in power prices. However, coal exports from the regions have been gaining momentum recently, up 26.8% last year after Russia allowed quota-free imports from the breakaway republics.
Considering all the constraints weighing on the global coal market, analysts say the pricing situation remains unclear.
“[Buyers have] very few options, there are supply issues everywhere,” Vasudev Pamnani from Indian consultancy Lavi Coal Info OPC told Reuters.
Fast food giant reports an annual increase of 13.8%
Fast-food giant McDonald’s on Thursday reported its largest annual increase in US sales since 1993. Sales at its American restaurants open for at least 13 months soared 13.8%.
The fourth quarter alone saw US sales jump 7.5%, partly due to price increases on some items on its menu.
In October last year, the company’s CEO, Chris Kempczinski, said menu prices were about 6% higher in 2021 compared to 2020, which didn’t turn off customers and “has been pretty well received” by them.
The fast-food chain was forced to raise prices to tackle wage inflation and cover the increased costs of food and paper, CFO Kevin Ozan said during an analyst call this week, as cited by CNN. He noted that costs may keep growing in 2022, as Covid-19-induced supply chain issues are expected to persist. McDonald’s also saw a significant boost in its digital sales and the growing popularity of certain menu items like the Crispy Chicken Sandwich and McRib.
Overall, the company said its 2021 sales “benefited from fewer restaurant closures and reduced Covid-related government restrictions compared with the prior year.”
The company reported a total of $6 billion in revenue for the past year. However, this fell short of analyst expectations, as did international sales. The chain’s shares shed some 2% following the sales report.
Washington apparently believes attempts to shatter Russian economy will have no effect on ordinary Russians
The Biden administration says sanctions that it plans to introduce against Russia in the event of a hypothetical war with Ukraine would target Russian industry and key public figures, but not ordinary people.
“We can’t preview every action, but the intent there really is to have measures that we think will degrade Russia’s industrial capabilities and industrial production capacity over time, not to go after individual, everyday Russian consumers,” White House national security official Peter Harrell said in a speech to the Massachusetts Export Center on Thursday, as cited by Reuters.
Harrell also stated that in the event of military escalation, Washington is ready to immediately impose “crippling financial costs on major Russian financial institutions as well as to impose a range of quite sweeping export controls that will degrade Russian industrial capacity over the mid- and long term.” He went on to specify that the US strategy includes sanctions against major Russian financial institutions aiming “to trigger capital flight, to trigger inflation, to make the Russian Central Bank provide bailouts to its banks… so [Russian President Vladimir] Putin feels costs on day one.” Harrell’s remarks narrow the scope of measures that may be introduced, however, it appears unlikely that the ordinary consumer in Russia would not be affected by the collapse of the country’s economy, as Washington proposes.
Harrell did say he hoped measures would never have to be implemented, but stressed that Washington is fully prepared to introduce them if need be. According to the official, the measures aim to “degrade Russia’s ability to have industrial production in a couple of key sectors.” He did not specify the sectors, but other White House officials did mention the aviation, maritime, robotics, artificial intelligence, quantum computing, and defense industries. According to various sources, the US has the means to stop firms worldwide from shipping items like semiconductor chips made with US technology to Russia, as it did with China’s Huawei. Talks regarding the matter have reportedly been held with Taiwan and South Korea, major manufacturers of chips.
On Friday, Commerce Department official Thea Kendler noted that sanctions would also target Russia’s “key people,” while US President Joe Biden earlier this week vowed to consider personal sanctions against the Russian leader himself.
All measures are to come “in waves,” with US officials “quite confident we will have a very high degree of alignment with Europe if Russia does invade Ukraine.”
The talk of potential sanctions against Russia comes amid the global hype over Moscow’s recent amassing of troops in its regions bordering with neighboring Ukraine. Western states, largely at the behest of Washington, view it as a preface to Russia’s invasion of Ukraine. The Kremlin, however, repeatedly stressed that no such intentions exist and the movement of a country’s troops within its borders should not concern outsiders.
The global trade regulator has issued a decision on China’s tariff countermeasures against the United States
The World Trade Organization (WTO) allowed China this week to retaliate with duties on $645 million worth of US imports per year over Washington’s failure to comply with international trade rules. The case is part of a decade-old trade dispute over US anti-subsidy duties on Chinese goods.
The dispute dates back to 2012, when Beijing applied to the WTO to challenge countervailing duties that Washington introduced between 2008 and 2012 on 22 Chinese products, including paper, solar panels, and steel wire. Beijing had initially asked the trade body to award it the right to impose tariffs on $2.4 billion of US goods but later scaled that back to $788.75 million.
“China urges the US to stop looking for excuses and immediately take action to correct its wrongdoings in trade remedy investigations against China,” Gao Feng, the spokesman for China’s Ministry of Commerce, said on Thursday, as quoted by the South China Morning Post.
The WTO ruling marks the second time that China has been authorized to fight back against US anti-dumping duties. In November 2019, a WTO arbitrator allowed Beijing to slap duties on up to $3.58 billion worth of US imports. In that separate case, the trade body also found fault in the way Washington determined whether Chinese products are being dumped on the US market.
The US has tariffs on more than $300 billion of Chinese goods imposed by former US President Donald Trump, most of which are still in place.
