AFP

Indonesia has launched an anti-trust investigation into Google over the tech firm’s insistence that its payment system be used for purchases from its app store, authorities said Thursday, accusing it of unfair business practices.

The US internet giant has been under legal scrutiny in a number of countries over its stipulation that its billing system be used by all buyers on Google Play.

Authorities in Jakarta said in a statement they suspected “Google has abused its dominant position by imposing conditional sales and discriminatory practices in digital application distribution in Indonesia”.

Google Play is the largest app distribution platform in Indonesia, a country of 270 million people.

Third party developers offering their apps on Google Play are charged a 15 to 30 percent service fee, higher than the five percent imposed by other payment systems, according to an initial probe by the nation’s anti-trust agency.

“The respective developers cannot refuse the obligation because Google can impose sanctions by removing their applications from the Google Play store and preventing them from making updates to their applications,” the agency said.

Google did not immediately reply to a request for comment from AFP.

The American multinational has faced a barrage of legal cases in the United States, Europe and Asia based on similar accusations.

Google has also faced claims that it unfairly forced its search engine and Chrome internet browser on phone makers using the Android operating system.

On Wednesday, the European Union’s second-highest court ruled that “Google imposed unlawful restrictions on manufacturers of Android mobile devices”.

That case was the third of three major cases brought against Google by the EU’s competition czar Margrethe Vestager, whose legal challenges were the first worldwide to directly take on Silicon Valley tech giants.

South Korea fined Google nearly $180 million last year for abusing its dominant market position in a similar case regarding the Android system.

US President Joe Biden announced Thursday that railroad companies and unions had reached a tentative deal to avert a strike that had threatened to disrupt travel and supply chains.

The agreement was reached after marathon talks at the Labor Department in Washington that began Wednesday and stretched late into the night.

Biden, in a statement released by the White House, said the deal, which comes two months before midterm elections, “is an important win for our economy and the American people.

“The hard work done to reach this tentative agreement means that our economy can avert the significant damage any shutdown would have brought,” the president said.

“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned.”

Unions representing freight company workers had threatened to go on strike at midnight on Friday if a deal had not been reached.

The Association of American Railroads, which represents the nation’s freight railroads, welcomed the agreement, which calls for a 24 percent wage increase between 2020 and 2024.

Major freight carrier Union Pacific said it “looks forward to the unions ratifying these agreements and working with employees as we focus on restoring supply chain fluidity.”

– Amtrak restoring services –

Amtrak, the US rail passenger operator, which had announced plans to cancel long-distance train services if freight workers went on strike, said it would immediately get trains rolling again.

“Amtrak is working to quickly restore canceled trains and reaching out to impacted customers to accommodate on first available departures,” it said in a statement.

In his statement, Biden called the deal a “win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries.”

“I thank the unions and rail companies for negotiating in good faith and reaching a tentative agreement that will keep our critical rail system working and avoid disruption of our economy,” he said.  

Biden regularly expresses strong support for workers but is also struggling to avoid further economic damage ahead of the midterm congressional elections in early November.

Voters already are worried about soaring prices in the post-pandemic economy, where supply chain issues have been a constant scourge and annual inflation has surged to a 40-year high.

The Association of American Railroads had warned that a strike would bring 7,000 trains to a halt, costing $2 billion a day.

Biden in July appointed an arbitration panel to facilitate the discussions and head off a work stoppage. 

Farmers and retailers had warned that a strike would hit US supply chains already battered by the Covid-19 pandemic.

“There is no real substitute for moving agricultural goods,” warned American Farm Bureau Federation president Zippy Duvall.

Amsterdam’s Schiphol airport chief executive Dick Benschop announced his resignation on Thursday following months of chaos at one of Europe’s largest transport hubs, plagued by long queues and baggage handling issues.

The troubles at Schiphol were among the worst in a summer where the global aviation industry struggled to cope with a surge in travel due to staff shortages after laying off thousands during the Covid pandemic. 

Benschop’s decision comes as Europe’s second-largest airport again on Monday asked airlines to cancel flights and passengers had to stand in line for hours before catching flights.

“There is a lot of attention, and also criticism, for the way in which Schiphol is tackling the problems and for my responsibility as CEO,” Benschop said in a statement.

“I am making room on my own initiative to give Schiphol the space to make a new start,” he said.

Benschop warned that Schiphol was due to announce further “bad news” measures “today or tomorrow for the coming weeks” which will lead to further disruption at the airport, which at its peak in 2019 handled almost 72 million passengers.

Benschop, a former top manager at Shell and deputy minister announced his resignation at a meeting of the airport’s supervisory board on Wednesday night.

“He will remain in his function until a successor has been appointed,” Schiphol added in the statement.

Benschop last month blamed the long queues over the summer, which saw numerous passengers miss flights despite arriving hours ahead of departure — on staff shortages.

Baggage handlers earlier this year walked off the job in a wildcat strike and lost and unclaimed luggage remains a problem.

The airport reduced passenger numbers since July in an effort to bring down waiting times. 

Schiphol also paid staff bonuses for the busy summer months, but many of those are set to finish at the end of September, while others had already ended.

“Improvements have been made over the summer, but these are not enough,” said Jaap Winter, who chairs Schiphol’s supervisory board.

He too warned further limitations on capacity may be necessary and that Schiphol more measures were needed to guarantee the airport’s security.

“As a national and international airport, Schiphol must return to the level of quality that passengers and airlines are accustomed to,” Winter said.

– ‘Need action’ –

Aviation companies as well as trade unions said they were sorry to see Benschop go, but understood that his position at the airport was untenable. 

KLM chief executive Marjan Rintel told the NOS public broadcaster she understood why Benschop made the decision “given the ongoing chaos.”

The FNV umbrella labour federation, which represents many of Schiphol’s employees, said it was “surprised by Benschop’s decision” but understood why he stepped down.

“I’m not sure a resignation is necessarily going to bring us closer to a solution,” FNV spokesman Jaap van Doesburg said.

“What we rather see is action to solve the problem,” he told the NOS.

“Benschop, over the long-term took steps to go for quality rather than quantity at the airport,” said the ANVR, the umbrella organisation for Dutch travel companies.

“But this means that the problems have not been solved in the short term — and that is terrible,” ANVR director Frank Oostdam said. 

Passenger numbers at Schiphol plummeted from over 70 million in 2019 to 20.8 million in 2020, the first year of the pandemic and to 23 million last year.

In August, however, 5.2 million passengers passed through Schiphol’s gates, as opposed to 3.8 million last year at the same time and 1.8 million in 2020.

A drop in electric power generation and a modest uptick in manufacturing led to a small decline in overall US industrial production in August, the Federal Reserve said Thursday.

Total output slipped 0.2 percent, worse than economists expected, on the 2.3 percent drop in utilities, which was the second straight decline.

Manufacturing edged up 0.1 percent, while mining output was flat after five consecutive months of gains, the report said.

Rubeela Farooqi of High Frequency Economics noted the downside surprise in the data.

“Momentum in factory activity has slowed,” she said. “Supply chain constraints and price pressures appear to be easing, which is a positive for manufacturing.

“But factory activity is likely to moderate in response to slowing demand amid a rising interest rate backdrop,” she added.

Production of vehicles and parts fell 1.4 percent, and the big gain in July was cut in half after revisions, the data showed.

A 3.5 percent jump in petroleum output and a 2.1 percent increase in aerospace and other transportation equipment helped offset other losses, the report showed.

Overall industrial production is up 3.7 percent compared to August 2021, while manufacturing output is 3.3 percent higher, according to the figures.

Industrial capacity in use slipped to 80 percent, from 80.2 percent, in the prior month, the report said.

US consumers buying cars and going to restaurants and bars in August drove a surprise bounce in retail sales, even as spending on gasoline fell as prices at the pump dropped, according to government data Thursday.

Americans flush with savings have been a key driver of the US pandemic recovery and the Federal Reserve is keeping a careful eye on economic data as it battles to quash red-hot inflation without tipping the world’s largest economy into recession.

Retail sales last month rose 0.3 percent compared to July, to $683.3 billion, the Commerce Department said.

But while the headline gain was much better than the flat result economists had projected, the figure for July was revised down to show a 0.4 percent drop, so the August increase means the total remains below the level in June.

The 3.0 percent jump in auto sales was the main factor behind the increase, and when that segment is excluded, retail sales would have declined 0.3 percent, according to the report.

Gasoline stations saw sales drop 4.2 percent following weeks of declining energy costs.

US gas prices at the pump soared in the wake of the Russian invasion of Ukraine in late February, but in recent weeks have been trending down and have fallen by more than $1 a gallon after hitting an all-time high of over $5 in mid-June, squeezing family budgets.

Meanwhile, restaurants and bars rose 1.1 percent, as did building supplies, the report said, but online sales fell.

“Households continue to spend, supported by strong job growth and rising nominal incomes. However, households face headwinds from elevated inflation that is not yet showing any significant sign of abating,” said Rubeela Farooqi of High Frequency Economics.

The data are seasonally adjusted but do not take into account changes in prices, so as costs rise, a shopping dollar does not stretch as far and American families have had to use more of their earnings on staple goods.

The latest consumer price data showing widespread inflation has solidified expectations that the Federal Reserve will announce a third consecutive three-quarter-point interest rate increase at its policy meeting next week.

The central bank has raised the benchmark borrowing rate four times this year, including two massive three-quarter point increases in June and July after US annual inflation spiked to 9.1 percent in June.

While the annual pace slowed to 8.3 percent in August, Fed officials have made it clear they will continue to hike borrowing costs until inflation moves down.