Is Margrethe Vestager, the EU competition commissioner, on a mission to undermine Google? And has the commission, steeped in 12 years of conflict with Microsoft, got a problem with the entire US technology industry? In less exaggerated form, some US voices may make the argument. Vestager’s latest inquiry, into alleged monopoly abuse of the Android operating system, is Brussels’ second Google probe in 12 months.
“We have no grudge against any company,” says Vestager. “We have an obligation to look at whether behaviour is anti-competitive or an abuse of dominance.” That’s what you’d expect her to say, of course. But she’s surely correct: the complaint of anti-Americanism is a distraction, and it also seems plain wrong.
Look at the ingredients of the latest inquiry. Google’s Android operating system is installed on four out of five smartphones. The marketplace is enormous and important for consumers and businesses. We also know the power of pre-installed apps to reach into wallets – most of us are lazy and don’t compare products. And we have learned that a search function that is “free” to consumers can distort markets in ways that are not immediately obvious. Put those facts together and the potential for abuse clearly exists.
Whether Google has in fact used devious or illegal tactics with Android will be settled by the evidence. All that can reasonably be guessed at the outset is that the investigation will roll on for years and generate lucrative employment for thousands of lawyers.
But anti-American or anti-Google? No. It’s just that the US is very good at producing large technology companies that rise to dominate important markets. It would be nice if there were more European rivals to complain about.
Port Talbot is no place for a staff whip-round
A word of advice to any Port Talbot steelworker who may be asked to contribute funds to a management buyout (MBO) attempt: make sure your head rules your heart.
The idea that individuals could be asked to find up to £10,000 to help fund a deal is alarming. The buyout plan was rejected by Tata on commercial grounds. Other potential backers may take a more optimistic view but any purchase would be high risk; it could hardly be otherwise. This is not suitable territory for a whip-round among non-management employees.
In any case, such sums would be a pittance in the context of the required capital. If the financial backing exists, great; if it doesn’t, don’t ask staff to risk any part of their savings. Let’s hope Sir Terry Matthews, the Welsh billionaire helping the MBO consortium, appreciates the point. His hero status would evaporate in an instant if workers’ cash were lost in a perilous adventure.
If the government eventually ends up chipping in cash or loans to support an MBO – still a very big if – it should insist the £10,000 idea is dropped immediately. A mixture of taxpayers’ cash and steelworkers’ life savings just isn’t sensible.
Shareholders are not holding back
We’ve seen shareholder rebellions over pay in the past – 2012 was the last vintage crop – but one old-hand FTSE 100 chairman reports that something is different this time. First, fund managers are giving less feedback to pay committees on what they think. Second, unhappy institutional shareholders are no longer registering their disapproval with an abstention and are instead going straight to the “against” box.
Both factors seemed to play a part at BP last Thursday. At the start of the week, the old company was braced for a 25% rebellion, not the 59% it got. And formal abstentions were few: just 464m votes versus 6.8bn against.
The mining firm Anglo American holds its annual meeting on Thursday and the chief beef is the number of share options granted to executives at a price that may turn out to be the bottom of the commodities market. The whisper suggests a rebellion of about a third of Anglo shareholders. If the figure is higher, the mood has definitely changed.
Fund managers’ new behaviour – if that’s what it is – makes life harder for boards but is very welcome. Companies’ traditional pre-vote tactic of softening up fund managers behind the scenes was always an unedifying game of calling in favours. Better to get the decisions right at the outset.
And, if fund managers have decided abstentions are a waste of time, it’s about time. Votes like BP’s last week are merely advisory. If you can’t form a definite opinion in a poll that obliges a company to do precisely nothing, you don’t deserve to be managing other people’s money.
