Bloomberg - Evening Briefing - Targeting Silicon Valley

Given the number of regulatory enforcement cases being brought against or contemplated for technology giants, one could be forgiven for thinking the Biden administration has declared war on Silicon Valley. First among equals is the long anticipated trial of the Justice Department’s antitrust lawsuit against Google, which began Tuesday. It marks a rare moment of bipartisanship as the DOJ and 52 attorneys general from states and US territories allege the search-engine Goliath illegally maintained a monopoly by paying billions of dollars to tech rivals, smartphone makers and wireless providers in exchange for being set as the preselected option or default on mobile phones and web browsers. Google’s defense? Its product is so good that consumers can’t help but choose it. The landmark litigation—which hearkens back to the government’s antitrust battle with Microsoft at the turn of the century—isn’t the only threat facing Google or the tech sector for that matter. The DOJ has already filed a second antitrust case against Google over its advertising dominance. Meanwhile, the Biden administration’s increasingly aggressive Federal Trade Commission is looking to breakup Facebook parent Meta and is expected to sue Amazon as well. And a separate Justice Department probe into Apple could result in another lawsuit later this year. If the DOJ wins this first trial against Google, it may seek to break off parent Alphabet’s search business from other products—Android and Google Maps among them. Such an outcome would be the biggest forced breakup of a US company since AT&T was taken apart in 1984. —Margaret Sutherlin

A slide in technology companies—including Apple—dragged down the market Tuesday, with investors looking forward to an inflation report expected Wednesday. The Nasdaq 100 fell 1%, underperforming other benchmarks. Here’s your markets wrap.

An Apple iPhone now costs $1,200. The company revealed its latest model and upgrades to its smartwatch during a product launch. Apple highlighted new materials, camera upgrades and improved performance to coax back consumers in a sluggish smartphone market.

The average US income fell to $74,580 last year—the third straight annual decline and the most since 2010. Last year, American families faced the largest annual increase in the cost-of-living adjustment in over four decades. The US Census Bureau report on income also showed one measure of poverty fell, while another based on post-tax income ticked higher in the first increase in over 10 years, as did the child poverty rate.

The number of people living in non-metro US areas outgrew the urban population for the first time in three decades in 2021, and the rural population expanded again in 2022 new data shows. Rural America is booming, but the influx of new people has sparked resentment over surging house prices, overloaded schools and impacted farmland prices.

Bowing to pressure from the Republican party’s far-right members, who earlier this year secured the ability to easily seek his ejection, House Speaker Kevin McCarthy said he would greenlight an impeachment inquiry into President Joe Biden over alleged business dealings involving his son Hunter, despite the lack of any evidence of wrongdoing. In a break from previous impeachment inquiries, McCarthy bypassed a House floor vote for the probe, which while under GOP control wasn’t a guaranteed success. More moderate Republicans have suggested they weren’t comfortable with an impeachment inquiry without any indication of the requisite high crimes or misdemeanors. 

Kevin McCarthy Photographer: Al Drago/Bloomberg

Regulators told CVS, Walgreens and other companies that some over-the-counter eye drops are illegally marketed and pose a public health concern to Americans. Some of the eye drops, including ones marketed by CVS and Walgreens, were manufactured by companies known to have quality issues. Earlier this year, a deadly bacterial outbreak was tied to over-the-counter eyedrops. (Regulators also said on Tuesday that a common nasal decongestant doesn’t work). 

Mexico is reaping the benefits of US-China tensions. Mexico—not China—is now the biggest trading partner for the US. Companies like Tesla, GM, Kia and others are piling into the country with billions of dollars in investments and new factories. While a golden economic opportunity, Mexico also has a history of missing these moments, and there are plenty of obstacles that could cut the boom short.  

• Rescue turns to recovery in Morocco as floods in Libya kill thousands.
• El Salvador has jailed 1.6% of its population.
• BP’s CEO resigned over past relationships with employees.
• Kim Jong Un has arrived in Russia on a swanky bulletproof train.
• It looks like yet another Premier League team is getting a US owner.
• Japan is weighing building a train that would run halfway up Mt. Fuji.
• NY Jet Aaron Rodgers will miss this NFL season with an Achilles injury.

For the last several years, Las Vegas pleasure seekers might have been puzzled as they gazed westward from the Strip. Looming in the distance was a 366-foot-tall sphere. The dark orb bore a resemblance to the Death Star but lacked any signage offering a clue to its purpose (or any orbiting TIE fighters and Star Destroyers). It was obviously an attraction, but what kind? The mystery, it turns out, cost $2.3 billion to build. But what is it?

The Sphere  Photographer: Mikayla Whitmore for Bloomberg Businessweek

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