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India watchdog probes accusations that Google abused Android: Sources

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India’s antitrust commission is looking into accusations that Alphabet Inc’s unit Google abuses its popular Android mobile operating system to block its rivals, four sources with direct knowledge of the matter told Reuters.

The Competition Commission of India (CCI) has for the past six months been reviewing a case similar to one Google faced in Europe that led to a fine of 4.34 billion euro ($5 billion) by antitrust regulators last year, three of the sources said. Google has challenged that order.

The European Commission found Google had abused its market dominance since 2011 with practices such as forcing manufacturers to pre-install Google Search and its Chrome browser, together with its Google Play app store on Android devices.

“It is on the lines of the EU case, but at a preliminary stage,” said one of the sources, who is aware of the CCI investigation.

Google declined to comment. The CCI did not respond to Reuters’ queries.

The watchdog’s enquiry into allegations against Google over its Android platform has not previously been reported.

Google executives have in recent months met Indian antitrust officials at least once to discuss the complaint, which was filed by a group of individuals, one of the sources said.

The Indian watchdog could ask its investigations unit to further investigate the accusations against Google, or throw out the complaint if it lacks merit. The watchdog’s investigations have historically taken years to complete.

Android, used by device makers for free, features on about 85 percent of the world’s smartphones. In India, about 98 percent of the smartphones sold in 2018 used the platform, Counterpoint Research estimates.

In October, Google said it would charge smartphone makers a fee for using its popular Google Play app store and also allow them to use rival versions of Android to comply with the EU order.

The change, however, covered only the European Economic Area, which comprises the 28 EU countries and Iceland, Liechtenstein and Norway.

“The CCI will have a tough time not initiating a formal investigation into Google given the EU case, unless they can show the problem has been addressed (by remedies),” one of the sources said.

The Indian complaint presents the latest regulatory headache for the Mountain View, California-based company in a key growth market.

Last year, the Indian antitrust watchdog imposed a fine of 1.36 billion rupees ($19 million) on Google for “search bias” and abuse of its dominant position. It also found Google had put its commercial flight search function in a prominent position on the search results page.

Google appealed against that order, saying the ruling could cause it “irreparable” harm and reputational loss, Reuters reported.

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Global markets are rallying on China and Jamie Dimon

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Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the opening bell, January 4, 2019 in New York City.

Drew Angerer | Getty Images

Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the opening bell, January 4, 2019 in New York City.

Stocks are rallying around the world on two headlines that support the bull thesis: strong China economic data and J.P. Morgan CEO Jamie Dimon’s supportive comments on the U.S. economy.

U.S. stock futures and European equities gained strongly around midday ET, and bond yields rose as China released data after the close of markets there indicating that its bank lending numbers surged back in March, and that exports rebounded in March.

“We are definitely seeing ‘green shoots’ and the effect of China’s monetary and fiscal stimulus,” Brendan Ahern, who runs the KraneShares China Internet ETF and the KraneShares MSCI China A Share ETF, told me.

U.S. stock futures took another move up at 6:50 a.m. ET when J.P. Morgan reported numbers well above expectations, but more importantly Dimon provided this comment on the macro environment: “Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”

Some geopolitical uncertainty. U.S. economy growing. Inflation moderate. Strong consumer. This, Nick Raich from Earnings Scout tells me, plays into the bull scenario that China is bottoming and the U.S. economy will remain strong: “The main story for investors this year is the numbers are better than feared,” he said.

Raich notes that including the four banks reporting today, 29 companies have reported earnings for the first quarter so far. Of that, 83% are beating estimates, higher than normal. Most importantly, they are beating by an average of 7.2 percentage points, far higher than the usual 3.5 percentage point beat.

That’s because analysts dramatically cut estimates in December on concerns of an imminent global meltdown, which has not happened.

Bottom line: Dimon’s comment reduces fears of an imminent recession, and there is a good chance we will avoid seeing the S&P 500 earnings go negative for the first quarter.

No earnings recession I guess.

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Italy’s Tria says no backlash from US after signing deal with China

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Italy hasn’t suffered backlash from U.S. authorities after having agreed to be part of China’s Belt and Road initiative, the country’s finance minister told CNBC on Friday.

Rome was the first major G7 economy to sign a deal with Beijing to be part of its massive infrastructure plan — a move that has raised eyebrows in the United States and in some other European countries.

However, Giovanni Tria, an economist in charge of Italy’s finances, said: “We have not (had) any backlash, we have a strategic partnership, an alliance with the United States and the other countries allied in NATO and this doesn’t change.”

The Belt and Road scheme is meant to create a vast global network of land, sea and digital connections linking China with Southeast Asia, Central Asia, the Middle East, Europe and Africa. Critics say the unprecedented infrastructure plan will favor Chinese firms, boost Beijing’s international influence and force developing nations to take on high debt burdens.

The White House has previously said Italy’s involvement in China’s grand plan could hurt its international reputation, according to the Financial Times.

Italian Deputy Prime Minister Luigi Di Maio told CNBC last month that his country’s participation in the Belt and Road initiative is “nothing to worry about.”

“We are maximizing all precautionary measures, and I want to tell the U.S., and I will tell them as well in next week’s visit, that they are our allies, and that we understand their concerns,” Di Maio said.

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Euro zone economy to grow thanks to domestic demand, IMF says

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Poul Thomsen, director of the IMF's European Department, holds a press conference during the IMF - World Bank Spring Meetings at International Monetary Fund Headquarters in Washington, DC, April 12, 2019.

SAUL LOEB | AFP | Getty Images

Poul Thomsen, director of the IMF’s European Department, holds a press conference during the IMF – World Bank Spring Meetings at International Monetary Fund Headquarters in Washington, DC, April 12, 2019.

The International Monetary Fund (IMF) has admitted it was “surprised” by the extent of the recent slowdown in the euro zone, but expects growth to pick up again.

The euro zone economy has struggled with changes in domestic policies in Germany, social unrest in France, and weaker external trade. However, some of that pressured has started to ease and domestic demand should drive further growth, Poul Thomsen, director of the IMF’s European Department, said Friday.

“The European slowdown…has been pretty pronounced. We expected some slowdown, growth had been above potential for a while, it’s quite a mature recovery, (but) we were surprised by the softness and the depth of the slowdown,” Thomsen told CNBC’s Joummana Bercetche at the IMF’s Spring meetings.

The European Central Bank (ECB) said in early March that it has seen a “sizable moderation in economic expansion that will extend into the current year.” This led the central bank to slash its growth forecasts for this year to 1.1 percent from a 1.7 percent estimate last December. At the time, ECB President Mario Draghi said geopolitics, protectionism and vulnerabilities in emerging markets were denting economic sentiment.

Thomsen said Friday that in addition to Draghi’s main concerns there are also temporary factors impacting the euro zone, such as the social unrest in France and changes to car emission rules which had impacted Germany’s auto sector.

However, the IMF representative said he remained hopeful about the upcoming months, noting “Temporary factors that we already see unwinding.”

Thomsen said he expected domestic demand “to drive the recovery going forward,” helped along by a positive labor market, current oil prices and the support of monetary policy,

Also speaking to CNBC at the IMF Spring meetings was Klaus Regling, the managing director of the European Stability Mechanism. Regling said that while growth in the euro zone is not going to be as strong as in 2017, the region is far from a recession.

“We will not see in the next two, three years the growth rates of 2017. It’s quite OK to say that the best is over, but it doesn’t mean that there is a crisis,” he said.

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