Google faces US government attempt to break it up

📍Top line: The US Justice Department (DoJ) is considering forcing Google to break up its business, marking a historic move against one of the world’s largest tech companies. 

Google could face restrictions on its own products, including its Chrome browser, Play Store, and Android operating system. The department is also looking to block Google from paying other tech companies—such as Apple—to have its search engine pre-installed as the default option on devices. In 2021, Google spent over $26 billion on such deals.

A Justice Department spokesperson emphasised the need for long-term solutions, stating: "Fully remedying these harms requires not only ending Google's control of distribution today, but also ensuring Google cannot control the distribution of tomorrow."

Netflix reports record revenues

📍Top line: Netflix has reported record UK revenues of almost £1.7 billion for 2023, a significant increase from the £1.5 billion it earned the previous year, largely driven by its crackdown on password sharing and subscriber growth. The company's pre-tax profits surged by nearly 80%, reaching £61 million.

The US streaming giant attributed the increase to its 7% rise in UK subscriber numbers following a policy requiring users to pay an additional £4.99 per month to share their account with someone outside their household. Although Netflix does not publish country-specific subscriber data, it revealed that its global subscriber base is close to 280 million.

In addition to password sharing enforcement, Netflix also boosted revenues by increasing subscription prices in late 2023. The basic membership for pre-existing customers rose by £1 to £7.99, while the premium tier saw a £2 hike to £17.99.

Major releases like the final season of The Crown, along with Bridgerton and Sex Education, contributed to Netflix’s success. The company's co-chief executive, Ted Sarandos, emphasised the UK's importance to Netflix, calling it "one of the best places for TV and film."

Elsewhere in business:

💊 UK pharmaceutical giant GSK has agreed to settle around 80,000 US lawsuits over its former blockbuster drug Zantac for up to $2.2 billion. The lawsuits alleged that the heartburn drug caused cancer, a claim GSK denies. The settlement covers 93% of the cases, with law firms recommending their clients accept the deal. GSK expects the settlement to be finalised by mid-2024, though it has admitted no liability.

📈 London-listed companies will now have greater leeway to pay top executives higher salaries under newly revised guidelines. The decision stems from growing concerns that London is struggling to remain competitive as a global financial hub due to its comparatively lower executive pay compared to Wall Street. For instance, Pascal Soriot, CEO of AstraZeneca and the best-paid boss in the FTSE 100, earned £16.9 million last year, far less than Hock Tan, CEO of Broadcom, who received £124 million.

Portugal plans to become low-tax haven for young

📍 Top line: Portugal is planning to implement a groundbreaking tax incentive program aimed at retaining young talent and countering a growing brain drain. The proposal, put forth by Prime Minister Luís Montenegro, offers 10 years of income tax reductions for people starting their careers, including a complete exemption from income tax in the first year.

The plan is a response to the emigration of young, highly educated Portuguese citizens seeking better opportunities abroad, particularly in wealthier European countries like France and Germany.

From 2008 to 2023, 361,000 young people between the ages of 15 and 35 left the country, representing two-thirds of all emigrants during that period. Under the plan, young workers will see significant reductions in their income tax burden:

• 0% tax in the first year

• 75% exemption in years two to four

• 50% exemption in years five to seven

• 25% exemption in years eight to ten

Elsewhere in the economy:

🗣️ Sir Keir Starmer has sparked speculation over potential tax increases after refusing to rule out a rise in national insurance contributions for employers. This came during a heated exchange with Rishi Sunak at Prime Minister's Questions, where Starmer avoided giving a direct answer on whether Labour’s commitment to not raise national insurance would apply to both employees and employers.

🚆 A train passenger has faced a hefty £462 fine after mistakenly using his railcard for a discount on a short journey from Prescot to Liverpool Lime Street. The incident, which occurred in January, was prosecuted by Northern Rail, highlighting ongoing concerns about the complexities of rail fare regulations in the UK. The passenger’s original train ticket was valued at just £4.30!

NatWest has opened applications for its Data and Analytics graduate scheme in Manchester. Successful applicants will assist a variety of teams in analysing and interpreting data to drive customer-oriented strategy. The two-year program requires graduates to have, or be on track to achieve, a 2:1 in any degree. Apply now here.

Tesla set to launch driverless taxi

📍Top line: Tesla CEO Elon Musk is set to unveil the highly anticipated Cybercab today, Tesla's first robotaxi. Billed as the "We, Robot" event, Musk is under pressure to deliver on his self-driving ambitions after delays pushed the launch from August to October. 

The Cybercab, reportedly featuring two seats and butterfly doors, uses cameras and computing power for navigation. Industry experts are eager for details on production timelines, cost per mile, and Tesla’s potential ride-share app. 

Musk has hinted that some robotaxis in Tesla's network will be company-owned, while Tesla owners could alternatively rent out their vehicles for rides when not in use. Tesla’s robotaxi is expected to compete with Waymo, owned by Google-parent Alphabet, which is already operating driverless vehicles in San Francisco.

Elsewhere in tech:

🤖 Meta has launched its artificial intelligence assistant in the UK following an earlier rollout in the US and Australia. The AI assistant allows users to generate text and images and interact with the chatbot by tapping an icon within the apps or using Ray-Ban Meta smart glasses, priced at £299 in the UK. These smart glasses feature a voice assistant for hands-free interaction, though the celebrity voice options—such as those of Judi Dench and John Cena—are not yet available in the UK.

🎾 Wimbledon will replace all 300 human line judges with an artificial intelligence-driven electronic line calling system starting in 2025, marking the first time in its 147-year history that matches will be officiated without human judges. This move will affect all 18 match courts and follows a trend seen at other major tennis tournaments like the US Open, which has been using a similar system since 2020.

🍬 Nestlé is introducing paper tubs for Quality Street chocolates for the first time. The new tubs, featuring a re-close mechanism for secure sealing after opening, will be available in 60 Tesco stores as part of a trial. This is another step in Nestlé's efforts to make Quality Street packaging more sustainable, following the controversial change in October 2022, when the brand replaced its iconic shiny plastic and foil wrappers with waxed paper for easier recycling.

💷 Rebekah Vardy has been ordered to pay Coleen Rooney £100,000 this month towards the legal costs she owes following the high-profile Wagatha Christie libel case. In 2022, Vardy lost the case, where the court ruled that it was "substantially true" she had leaked Rooney's private information to the press. As a result, Vardy was ordered to cover 90% of Rooney’s legal costs. Initially, these costs were estimated at £540,779, but they have since escalated to £1.8 million.

🧒 Children from wealthier families are more likely to use illegal drugs, drink alcohol, and vape, according to new analysis by the Social Mobility Commission. The study of NHS data revealed that 32% of children aged 11 to 15 from higher socioeconomic groups admitted to drinking alcohol, compared to 17% from less affluent backgrounds. Similarly, 23% of wealthier children reported using illegal drugs, versus 17% from poorer families.