Daily Business Briefing
July 8, 2021Updated
July 8, 2021, 11:12 p.m. ET
July 8, 2021, 11:12 p.m. ET
One of the federal government’s largest student loan servicers just called it quits.
The Pennsylvania Higher Education Assistance Agency — which oversees the loans of 8.5 million student borrowers — said Thursday that it would not renew its contract with the federal government when it ends later this year.
The agency, which is known to most borrowers as FedLoan, is one of several companies the Education Department pays to manage the government’s $1.59 trillion student loan portfolio. About 23 million borrowers aren’t making payments right now because of the temporary pause put in place because of the pandemic — and FedLoan’s announcement will only increase the pressure to extend the moratorium.
The pause on payments and interest could expire in less than three months — as soon as Sept. 30. The millions of borrowers whose loans are overseen by FedLoan, including those in the Public Service Loan Forgiveness program, will have to be moved to a new servicer at the same time the machinery of payment processing is getting back up to speed.
Turning the switch back on for tens of millions of borrowers was already going to be a monumental task, so consumer advocates and some legislators have been calling for the payment pause to be extended. They argue that the economic recovery has been uneven and that loan payments would have to resume just as other pieces of the pandemic safety net — including eviction moratoriums and enhanced unemployment benefits — are being dismantled. Democrats from both chambers of Congress wrote a letter to President Biden last month urging him to push payments off until at least March 31.
The Education Department declined to comment on whether the situation would delay the resumption of payments. But advocates for student borrowers said it was crucial that the system have more time.
“This ups the ante on the need to extend the payment pause,” said Persis Yu, a staff attorney at the National Consumer Law Center and the director of its Student Loan Borrower Assistance Project. “That was always a really tall order, and to try to do that while simultaneously transferring borrowers from one servicer to the next just compounds the amount of things that can go wrong.”
Ms. Yu also said she wondered whether other servicers would have the capacity to take on all the borrowers FedLoan now handles.
The Pennsylvania Higher Education Assistance Agency, a quasi-state agency, conducts its student-loan servicing operations for federally owned loans as FedLoan. It said in a statement that it planned instead to focus on its “core public service mission in Pennsylvania,” which includes helping students there pay for college. The agency said that it entered the contract with the Education Department in 2009 to support that mission, but that the federal programs “have grown increasingly complex and challenging while the cost to service those programs increased dramatically.”
The contract for FedLoan, which has been frequently criticized for deceptive practices and poor service, expires on Dec. 14. The agency said in a statement that it notified the Education Department on Thursday that it would not extend its contract “beyond what is needed to ensure a smooth transition for borrowers.”
Rich Cordray, the chief operating officer at the Federal Student Aid office at the Education Department, said in a statement that both sides had agreed to work together on a wind-down plan, which will “feature early and frequent communications and clear guidance on what borrowers should expect, as well as strong oversight” from his agency during the transition.
Such transitions haven’t always gone smoothly. Another servicer switch — involving 35 million loans from 2012 to 2013 — caused a series of problems for borrowers, according to an analysis released in October by the Student Borrower Protection Center and the American Federation of Teachers. The report said many borrowers weren’t notified that their loans had been transferred, and other accounts were riddled with errors.
Though the disruption will complicate an already cumbersome process, consumer advocates and some legislators were pleased that borrowers would no longer have to work with FedLoan. This year, it reached a settlement with the Massachusetts attorney general, resolving claims of unfair and deceptive practices that deprived teachers and other public servants of relief promised under the public service forgiveness programs. The New York’s attorney general sued FedLoan in 2019 for similar reasons, also claiming it had failed to deliver on its most basic tasks.
Seth Frotman, executive director of the Student Borrower Protection Center, called it “welcome news that the Department of Education will no longer rely on a company accused of widespread mismanagement.”
FedLoan’s original loan-servicing contract expired in June 2019, but it had continued working with the department through a series of extensions.
The decision was first reported by Penn Live.
Stocks fell on Thursday and bond yields dropped as anxiety over the bumpy economic recovery roiled financial markets.
The S&P 500 slid as much 1.6 percent before recovering some ground. By the end of the trading session, the index was down about 0.9 percent, a more modest drop but one that stood out in comparison to the relatively calm tone in financial markets in recent weeks.
Before Thursday, stocks had fallen only twice in the 13 previous trading days, with the S&P 500 in record territory much of that time. Thursday’s drop was Wall Street’s worst showing since mid-June.
But investors in the bond market have been signaling their concerns about the economy for days. Yields on 10-year Treasury notes, a benchmark for borrowing costs across the economy and a measure of the outlook for growth, have fallen sharply since late June.
Yields fall when traders buy bonds, something they do when they’re worried about the economy or other factors that could threaten riskier investments. On Thursday, the yield on the 10-year note fell further, dropping as low as 1.25 percent before recovering somewhat to 1.30 percent.
“There’s growing concern on how robust the economic recovery will be,” said Edward Moya, a senior market analyst at Oanda, a foreign currency exchange. “The virus spread in other countries is starting to suggest we won’t have a strong second half of the year.”
It wasn’t long ago that investors were instead worried about the prospect that the economy would overheat as nations emerged from lockdowns. Key measures of inflation have become important data points for financial markets because persistent price increases could prompt the Federal Reserve to start to back away from policies that support the economy.
Though the Fed has said it is far from that point, minutes from its mid-June meeting that were released on Wednesday showed that the central bank’s officials are growing divided about the path forward.
On Thursday, the Labor Department reported that new state unemployment claims rose slightly last week to 370,000, compared with the 350,000 expected by economists.
“It exemplifies the argument we’re nowhere near substantial further progress for the economy to warrant the Fed’s removal of accommodation,” Mr. Moya said.
The rise of the highly contagious Delta variant of the coronavirus has served as a reminder that the pandemic remains a threat to both public health and the economy, even though infections and deaths in the United States are near their lowest levels since testing became widely available.
Last month, World Health Organization officials urged even fully vaccinated people to continue wearing masks and taking other precautions, and officials in Los Angeles County reinstated a mask policy, recommending everyone wear masks indoors in public places.
On Wednesday, the Centers for Disease Control and Prevention estimated that the Delta variant now accounted for more than half of new infections in the United States, and on Thursday, Olympic organizers said they would bar spectators from most events after the declaration of a new state of emergency in Tokyo, a stark reminder how quickly the pandemic can derail plans.
Shares of companies that are geared toward the economy were all lower. JPMorgan Chase dropped 1.7 percent along with shares of many other banks, while the mining company Freeport-McMoRan fell 4.2 percent and the railroad operator CSX fell 6.2 percent.
Concerns about the pandemic were also evident in the volatile trading in travel and tourism companies, which were volatile on Thursday. Carnival Corp. fell 1.5 percent, while Norwegian Cruise Line dropped 1 percent.
Investors have also been weary of China’s latest crackdown on tech companies. Policymakers in Beijing declared this week that they would aim to strengthen oversight of Chinese companies, such as the ride-hailing app Didi, that listed their shares on exchanges overseas.
“That raises a concern more broadly about what China might do with its global platform in equities and it poses a risk if they were to force even more Chinese firms to pull back from the global market,” John Canavan, the lead analyst at Oxford Economics, said. “It could further exacerbate some of the equity woes.”
On Thursday, Chinese tech stocks fell sharply. The ride-hailing app Didi fell 5.8 percent, while the truck-hailing app Full Truck Alliance fell 10.9 percent.
Read moreCredit…Erin Schaff/The New York Times
Toyota said on Thursday that it would stop donating to Republicans who disputed the 2020 presidential vote after being the focus of an ad campaign by the Lincoln Project, a group that was founded to antagonize President Donald J. Trump with viral video criticisms.
The automaker said in a statement that its support of the politicians had “troubled some stakeholders.”
“At this time, we have decided to stop contributing to those members of Congress who contested the certification of certain states in the 2020 election,” the company said. It added that it was “committed to supporting and promoting actions that further our democracy” through its PAC and “has longstanding relationships with members of Congress across the political spectrum.”
The Lincoln Project had released an ad directed at Toyota, which it accused of donating $55,000 to 37 Republicans in Congress who pushed back against President Biden’s victory.
The Lincoln Project, known for its scathing anti-Trump videos and memes during the 2020 campaign, said the ad was part of a broader project aimed at decreasing funding for Republicans who resisted the results of the vote and played down the attack on the U.S. Capitol on Jan. 6. The group said it planned to release more ads in the following weeks naming companies that “have broken their pledges to withhold campaign funds to members of Congress who enabled, empowered and emboldened former President Trump and the insurrectionists.”
A report last month from the watchdog group Citizens for Responsibility and Ethics in Washington listed many other companies who continued donating to the 147 Republicans who voted to overturn the election results, including Boeing, Walmart and PNC Bank.
The Lincoln Project’s spot about Toyota includes footage of a vehicle crash test interspersed with images of the Jan. 6 riot. A narrator warns Toyota executives that “if they don’t reconsider where they send their money, Americans will reconsider where we send ours.”
The Lincoln Project said the ad would no longer run after Thursday. It was set to appear online in the same markets as Toyota’s top 20 dealerships and locally on Fox Business and CNBC in New York and in Plano, Texas, where Toyota’s American operations are based. The Lincoln Project said Comcast had refused to air the commercial in Washington; Comcast did not immediately provide a comment.
“Toyota made the right choice today,” the Lincoln Project said in a statement. “They put democracy ahead of transactional politics. We hope that the rest of corporate America will follow their lead — we’ll be there to make sure of it.”
Founded by Republican consultants opposed to Mr. Trump, the group started as a super PAC in 2019. Later, the founders sought to parlay the Lincoln Project’s popularity into a broader media enterprise, setting off internal disputes as it experimented with a new tone for the Biden administration.
The campaign targeting Toyota and other companies could offer the group a way to rebrand itself. Earlier this year, the Lincoln Project grappled with allegations that John Weaver, a co-founder, had harassed young men with sexually provocative messages for years. In June, the Lincoln Project said an independent investigation had found that its leadership was unaware of the accusations against Mr. Weaver until they were made public.
Read moreCredit…Stephen Lam/Reuters
Fidji Simo, the leader of Facebook’s namesake app, said on Thursday that she was leaving the social network to become the chief executive of Instacart, the on-demand grocery start-up that is preparing to become a public company.
Ms. Simo, 35, will replace Apoorva Mehta, 34, Instacart’s founder and chief executive, effective immediately. Mr. Mehta will become Instacart’s executive chairman.
“I’m excited to work with the talented teams at Instacart, as well as our retail partners, to reimagine the future of grocery,” Ms. Simo said in a statement.
Mr. Mehta said in a statement that he would remain engaged with Instacart’s business and “will partner with Fidji on long-term and strategic moves that will shape the future of Instacart and our industry for years to come.”
Ms. Simo, who is French, spent a decade at Facebook, where she worked her way up from a product marketing role to the head of its “big blue app.” Before that, she worked as a strategist at eBay. A graduate of the HEC School of Management in Paris, she joined Instacart’s board of directors this year.
For Instacart, Ms. Simo’s appointment is another step to potentially becoming a public company.
Instacart makes money by selling subscriptions to its on-demand grocery service and through associated fees. But it is looking to expand its advertising business with brands that want to promote their groceries to customers on the platform. Ms. Simo worked on Facebook’s advertising business and helped develop parts of the company’s mobile advertising.
‘We’re grateful for Fidji’s incredible leadership over the past decade and wish her all the best in her next endeavor,” said Tom Williams, a Facebook spokesman.
Tom Alison, a product and engineering executive at Facebook, will take over day-to-day operations of the Facebook app by the end of July. CNBC earlier reported on Ms. Simo’s departure from Facebook.
Read moreCredit…Massimo Pinca/Reuters
Stellantis, the automaker created by the merger of Fiat Chrysler and Peugeot SA, said on Thursday it would spend 30 billion euros ($35.5 billion) through 2025 to catch up in the electric-vehicle race.
It is the latest announcement by a large automaker accelerating the shift toward electric cars and trucks. Stellantis’s announcement followed large investment commitments made by companies like Volkswagen, General Motors and Ford Motor.
In a virtual presentation, Stellantis’s chief executive, Carlos Tavares, said electric and plug-in hybrid vehicles would make up 70 percent of the company’s sales in Europe and 40 percent of sales in North America by 2030.
“Stellantis is now in full electrification mode at full speed on its electrification journey,” he said.
As part of its strategy, Stellantis plans to build five battery plants in Europe and North America. Two of its European brands, Opel and Vauxhall, will only sell electrified vehicles after 2028. In the coming years, the company plans to sell an electric Dodge sports car, an electric Ram pickup truck and an electric Jeep.
The Fiat Chrysler-Peugeot merger was conceived as a bid to give the combined company the heft executives felt it needed to compete with larger automakers like General Motors, Ford Motor and Volkswagen that are spending billions of dollars on electric cars and have started producing several new models.
G.M. has said it aims to sell only electric vehicles after 2035, and Ford and Volkswagen has set similar timelines. Ford recently started selling the Mustang Mach E, an electric sport-utility vehicle, in the United States and Europe and plans to add a battery-powered version of its F-150 pickup next year.
Stellantis sells cars under 14 different brands, including Chrysler, Dodge, Jeep, Fiat, Alfa Romeo, Peugeot and Citroen. Peugeot acquired Opel and Vauxhall from G.M. in 2017.
Mr. Tavares said cost savings from the Fiat Chrysler-Peugeot deal would increase profits even as the company invests heavily in electric vehicles.
Read moreCredit…Ralph Orlowski/Reuters
The European Central Bank said Thursday that it would adjust the guideposts it uses to set monetary policy, giving it more room to deploy crisis measures even if inflation rises above its official target. The bank also said it would begin using its clout in bond markets to fight climate change.
After concluding an 18-month review of its strategy, the bank’s Governing Council said Thursday that it would no longer aim to keep inflation below, but close to, 2 percent, its guiding principle since 2003. Rather, the bank would simply aim for 2 percent and be ready to accept “a transitory period in which inflation is moderately above target.”
“Two percent is not a ceiling,” Christine Lagarde, the president of the European Central Bank, said during a news conference Thursday.
The seemingly minor change gives the bank space to keep pumping credit into the eurozone economy even if annual inflation rises above the target, as long as policymakers think the jump is temporary.
That situation may soon materialize. Inflation in the eurozone has been hovering around 2 percent in recent months, and could rise higher as economies reopen and shortages of needed products like semiconductors become more acute. According to the previous strategy, the central bank would be obligated to raise interest rates or take other measures to slow the economy, even if the crisis was not over.
By law, controlling prices in the 19 countries of the eurozone is the central bank’s main priority, so any adjustment to its approach to inflation has broad implications for the interest rates that businesses and consumers pay on loans, and for employment and economic growth.
The bank also said it would take climate change into account when it bought corporate bonds as part of its stimulus measures. The bond purchases, made with newly created money, are one of the bank’s main tools to stimulate borrowing and economic growth. But in the future, the European Central Bank will favor companies that have made sincere efforts to reduce the amount of carbon dioxide they produce.
In practice, the central bank has already provided ample evidence it was willing to bend its own rules to fight the pandemic, or the debt crisis that nearly destroyed the euro a decade ago.
“The more modern and clearer strategy will make it easier for the E.C.B. to communicate with markets and the public,” Holger Schmieding, chief economist at Berenberg Bank, said in a note to clients. “It enshrines the flexibility which the E.C.B. had granted itself anyway.”
The European Central Bank’s new approach is sure to generate criticism from places like Germany, where fear of inflation runs deep. Jens Weidmann, a member of the Governing Council and president of the Bundesbank, Germany’s central bank, has called for the European Central Bank to begin dialing back its stimulus to ensure that inflation does not get out of control. He has also said climate change was not a matter for central banks. But Ms. Lagarde said members had approved the new strategy unanimously.
The Governing Council defended its decision to make climate change a task for central banks Thursday, saying it was relevant to “inflation, output, employment, interest rates, investment and productivity; financial stability; and the transmission of monetary policy.”
Read moreCredit…Stephanie Lecocq/EPA, via Shutterstock
Germany’s three largest carmakers colluded illegally to limit the effectiveness of their emissions technology, leading to higher levels of harmful diesel pollution, European antitrust authorities said Thursday.
Volkswagen and its Porsche and Audi divisions must pay 500 million euros, or $590 million, and BMW will pay €373 million, or $442 million, as part of a settlement with the European Commission related to the cartel. Daimler avoided a fine that would have totaled €727 million because it blew the whistle on the plot, the European Commission said.
The settlement is another blow to the image of the German automakers, which dominate the high end of the car market but have lost some of their luster after Volkswagen admitted in 2015 that millions of cars it produced were fitted with software designed to dupe official emissions testers.
Daimler and BMW became tainted by the diesel scandal after the European Commission accused them in 2017 of illegally agreeing with Volkswagen on specifications for emissions treatment technology. Those accusations led to the settlement on Thursday.
The European Commission, the European Union’s administrative arm, did not accuse the carmakers of agreeing to deploy illegal technology. Rather, it said they had illegally agreed to deploy emissions technology that met minimum legal standards but was not as good as it could have been.
Among other things, the carmakers agreed to limit the size of the tanks used to hold a chemical, known as AdBlue, that neutralizes harmful nitrogen oxides in diesel emissions, the commission said. Larger tanks would have done a better job reducing pollution but taken space that companies preferred to use for audio speakers or other amenities.
“For over five years, the car manufacturers deliberately avoided to compete on cleaning better than what was required by E.U. emission standards,” Margrethe Vestager, the European Union’s competition commissioner, said in a statement. “And they did it despite the relevant technology being available.”
Volkswagen has since paid well over $20 billion in fines and legal settlements related to its diesel emissions cheating. Daimler admitted last year that its Mercedes-Benz cars had also been programmed to cheat on emissions tests and paid $2.2 billion as part of a settlement with U.S. authorities. Sales of diesel vehicles, which once accounted for more than half of the new cars sold in Europe, have plummeted.
BMW portrayed the settlement as a vindication because it did not accuse the company of emissions cheating, which it has consistently denied. The fine was lower than expected, freeing up €1 billion that BMW had set aside to cover penalties related to the cartel case.
“Unlike some of its competitors, the BMW Group never considered reduced, illegal emission control,” the company said in a statement. Discussion with the other carmakers “had no influence whatsoever on the company’s product decisions,” BMW said.
Daimler noted that it had cooperated with the investigation. “The European Commission explicitly found no evidence that there was any agreement regarding the use of prohibited defeat devices,” the company said in a statement.
Volkswagen agreed to the settlement but said it was considering appealing some aspects of it, which is permitted under European Union law.
“The commission is breaking new legal ground with this decision, because it is the first time it has prosecuted technical cooperation as an antitrust violation,” Volkswagen said in a statement. “It is also imposing fines even though the contents of the talks were never implemented and customers were therefore never harmed.”
Initial claims for state jobless benefits rose slightly last week, the Labor Department reported Thursday.
The weekly figure was about 370,000, up 3,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 99,000, down 15,000 from the week before. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 373,000, an increase of 2,000.)
New state claims remain high by historical standards but are one-third the level recorded in early January. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality.
More than 20 states have recently discontinued some or all federal pandemic unemployment benefits — including a $300 supplement to other benefits — even though they are funded through September. Officials in those states said the payments were keeping people from seeking work.
The Labor Department’s employment report for June showed that the economy had 6.8 million fewer jobs than before the pandemic. A separate report found 9.2 million job openings at the end of May as businesses that had closed or cut back during the pandemic raced to hire employees to meet the reviving demand.
But there is a substantial amount of turnover, with far more workers quitting their jobs than are being laid off — a sign that many are jumping to positions that pay even slightly more.
Credit…Pool photo by Graeme Jennings
Last week, Amazon fired a pre-emptive shot at the new chair of the Federal Trade Commission, Lina Khan, using a common line of attack on policymakers who held strong opinions in the past: trying to disqualify them for alleged bias.
Ms. Khan made her name with a forceful view on Amazon and antitrust, arguing that the sprawling tech giant showed how competition law was “unequipped” for the digital age. This, among other things, disqualifies Ms. Khan from participating in F.T.C. actions against Amazon, the company said. Amazon is a subject of the F.T.C.’s inquiry into Big Tech’s acquisitions of smaller rivals, and the agency is separately reviewing its proposed purchase of MGM.
So, the DealBook newsletter asks, does Amazon have a chance?
Disqualifying a commissioner isn’t easy. At her Senate confirmation hearing, Ms. Khan rejected the idea of a blanket disqualification from Big Tech investigations, saying she would consider such requests on a case-by-case basis and consult with F.T.C. counsel. Simply voicing opinions critical of companies is rarely cause for recusal, and most disqualification attempts fail.
Impartial “does not mean uninformed, unthinking, or inarticulate,” explained a federal appeals court in 1980, reversing the disqualification of an F.T.C. commissioner.
In 2010, Intel’s attempt to disqualify a commissioner who had previously been its antitrust counsel failed because the F.T.C. said his previous work bore no “substantial relationship” to the review at issue.
In 2012, a prospective commissioner who had worked for Google promised senators that he would recuse himself from Google-related cases for two years to avoid the appearance of impropriety. That is a point Amazon stressed in its motion — that the appearance of fairness matters, too.
Amazon’s filing may be “a warning shot,” said Bruce Hoffman, a partner at Cleary Gottlieb and the former director of the F.T.C.’s competition bureau. Because it isn’t attached to a case and aims to recuse Ms. Khan broadly, it essentially serves as a notice to the agency. It could be Amazon’s way of saying, “if you participate, this could haunt you,” he said.
Commissioners are chosen for their policy views, as well as their expertise, so many would be disqualified if having opinions was disqualifying, said the antitrust law scholar Eleanor Fox, Ms. Khan’s former colleague at Columbia. Asked whether Amazon’s motion would succeed in blocking Ms. Khan, she replied: “Oh, I don’t think so.”
Read moreCredit…Doug Mills/The New York Times
President Biden’s goal of cutting pollution by 50 percent from 2005 levels by 2030 would require a radical transformation of the nation’s economy away from fossil fuels, including a rapid shift by American drivers from internal combustion engines of the last century to zero-emissions electric vehicles.
To help meet that goal, the Biden administration is starting to write stringent auto pollution rules that could cut emissions deeply and force carmakers to increase sales of electric vehicles, according to four people familiar with the plan. That’s in addition to plans to restore tailpipe emissions standards to roughly the level set by President Barack Obama, Coral Davenport reports for The New York Times.
The risk for automakers is whether consumers will purchase electric vehicles that are generally more expensive and logistically challenging, because the nation lacks a network of electric-vehicle charging stations.
If Congress approves hundreds of billions of dollars for construction of charging stations as well as tax incentives for both buyers and makers of electric cars and trucks, Mr. Biden would most likely be able to secure industry support for more stringent rules that would result in more electric vehicles on the road. Currently, only about 2 percent of vehicles sold in the United States are electric.
But if a final infrastructure package includes little or no spending on electric vehicles, a tougher tailpipe rule would likely face opposition from automakers, who would be forced to build and try to sell costly electric cars.
Mr. Biden announced in late June that he had reached a deal with a bipartisan group of senators on an infrastructure package that would include about $7 billion of spending to build electric vehicle charging stations.
But that is barely a fraction of the $174 billion that Mr. Biden wants to spend on vehicle electrification in a second infrastructure bill this fall, which Democrats hope will include robust provisions to fund 500,000 electric vehicle charging stations and generous tax rebates for purchasers of electric vehicles. Neither bill is guaranteed to pass in the closely divided Congress.
Read moreCredit…Paulo Nunes dos Santos for The New York Times
The model that has fueled Ireland’s economy for decades is in peril, as a coalition of 130 nations works to overhaul a global tax system that Ireland depends on to lure businesses looking to reduce the taxes they pay.
At stake is Ireland’s low official corporate tax rate of 12.5 percent and a tax regime that helps global companies based there avoid paying taxes to other countries where they make profits, a setup that has put billions of euros into Ireland’s tax coffers and created hundreds of thousands of jobs, Liz Alderman reports for The New York Times.
Ireland was one of only nine countries not to sign on to a sweeping framework last week, overseen by the Organization for Economic Cooperation and Development, that could undermine those advantages. The accord would impose a new 15 percent global minimum corporate tax rate and force technology and retail giants to pay taxes where their goods or services were sold, rather than where the company had its headquarters. The details of the agreement are expected to be completed in October, and then each country’s government would need to adopt it.
Some might say the optics aren’t good — Ireland risks looking as if it wants to deprive other countries of their fair share of tax revenue — and the government in Dublin has been grudging in its statements on the issue. The finance ministry declined interview requests and did not respond to written questions. Similarly, multinational companies that have profited from the low-tax regime have been conspicuously silent, declining requests to discuss the issue.
An overhaul of the global tax order could cost Ireland 2 billion to 3 billion euros annually in lost tax revenue, the finance ministry estimates. Much of that money would go to other countries.
Overall, the Irish government hauled in €12 billion in corporate taxes last year, up from €4 billion seven years ago. Over half of the take came from the 10 largest multinationals.
A group of dozens of states and the District of Columbia are suing Google on claims that its mobile app store abuses its market power, expanding the legal challenges facing the internet search giant. The suit would be the fourth state or federal antitrust lawsuit filed against Google since October, but the first to scrutinize the company’s lucrative app store. It was being filed on Wednesday in federal court in the Northern District of California, according to a public filing, which showed the suit was being led by Utah, North Carolina, New York and Tennessee. Apple, which operates the other major app store for smartphones, is also under scrutiny for the cut it takes from developers for app sales and subscriptions.
If over the next two years Bill Gates and Melinda French Gates can’t find a way to work together at their foundation following their planned divorce, Mr. Gates will get full custody. That was one of the most important takeaways from a series of announcements about the future of the world’s largest charitable foundation made on Wednesday, overshadowing an injection of $15 billion in resources. The foundation also plans to add trustees outside their close circle, a step toward better governance that philanthropy experts had urged for years. The restructuring announced Wednesday could begin the process of making the Gates Foundation more responsive to the people its mission aims to help and loosen the grip on the reins that its founders have held for more than two decades.
Today in the On Tech newsletter, Shira Ovide writes that the internet promised to upend the old ways, and it did erode the power of old gatekeepers like Hollywood bosses or big box stores. But in their places are new and equally powerful digital gatekeepers, like Google and Apple, that can dictate who wins or loses.