India's competition commission accuses Google of abusing search dominance 

SEP 1, 20155:01 PM

[MUMBAI] India's competition authority has accused Google of abusing its dominant position in online search, people with knowledge of the matter said, which if proven could force the US company to alter its practices in a key market or even pay a big fine.

A preliminary report from the Competition Commission of India (CCI), a quasi-judicial regulatory body, found fault with Google's handling of its online advertising services and search results, said the people.

Google, which just last month appointed India-born Sundar Pichai as its new CEO, is already facing a billion-euro fine from the European Union after accusations the company cheated competitors by distorting Internet search results in favour of its shopping service. Google has rejected those charges.

The Indian regulator first began investigating Google in 2012, and a preliminary report was submitted to the top CCI officials about six months ago. The findings of that report have been mentioned in the local media in the last few days.

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The CCI is expected to make a final ruling after a hearing on Sept 17, where Google will present itself before a seven-person CCI panel, the people said.

CCI Chairperson Ashok Chawla was not immediately reachable over the phone for comments. "We're currently reviewing this report from the CCI's ongoing investigation," a Google spokesman said in a statement. "We continue to work closely with the CCI and remain confident that we comply fully with India's competition laws." The initial complaints of Google abusing its position in online search in India were filed by matchmaking website Bharat Matrimony and a not-for-profit organisation, Consumer Unity and Trust Society (CUTS).

Udai Mehta, assistant director at CUTS, said if the final ruling too finds Google guilty, the CCI can either order the company to halt what it deems unfair practices or fine it even as much as 10 per cent of its revenues. If found guilty, Google could challenge the decision in court, he said.

Google posted annual revenues of US$66 billion for 2014.

A guilty verdict could impact Google's growth in India, where it dominates Internet searches among the country's 300 million online users and is increasingly launching its Android phones and other initiatives to get more people on its operating system.

REUTERS

     

Foxconn cancels investment plan in Indonesia: Kontan

Taiwan's Foxconn Technology Group, the world's biggest electronic components maker, has cancelled plans to invest in a factory in Indonesia, Kontan daily reported on Tuesday, citing the head of an Indonesian business chamber. 

PHOTO: REUTERS

SEP 1, 20155:55 PM

[JAKARTA] Taiwan's Foxconn Technology Group, the world's biggest electronic components maker, has cancelled plans to invest in a factory in Indonesia, Kontan daily reported on Tuesday, citing the head of an Indonesian business chamber.

Foxconn, whose flagship listed unit is Hon Hai Precision Industry Co Ltd, said last year it may invest US$1 billion in Southeast Asia's biggest economy.

But the Apple Inc supplier had decided not to go ahead because of land issues, Indonesian Chamber of Commerce and Industry Chairman Suryo Bambang Sulisto was quoted as telling the business daily, casting doubt on the company's broader expansion plan in Indonesia.

Mr Sulisto did not respond to phone calls requesting comment. Foxconn declined to confirm or deny the report. "As we have stated on a number of occasions, Foxconn would consider investments in Indonesia or other markets only if they made commercial sense," the company said in a statement.

Foxconn, which assembles products for global phone makers, is one of the companies likely to be affected by a new law due to take effect in 2017 requiring firms that sell smartphones in Indonesia to produce some of their content locally.

Indonesian officials had initially said companies must source 40 per cent of their content locally, but on its website, the communications ministry said the figure was now 30 per cent. It was unclear why the percentage was changed.

Critics say the rule - part of a push by President Joko Widodo to transform Indonesia from an economy that consumes products into one that produces them - could increase costs and restrict access to technology.

Foxconn had previously planned to invest in hardware such as phones, tablets and televisions, as well as telecommunication services in Indonesia, its spokesman told Reuters last year.

The company had hoped to tap the domestic market of about 250 million people and use it as a base to export to the rest of Southeast Asia. But talks with authorities had stalled partly because the government was reluctant to accept Foxconn's request for free land, sources previously said.

Last month, Foxconn partnered with China's Xiaomi to assemble phones in India.

REUTERS

    
 

This new smartphone automatically moves files and apps to the cloud

SEP 1, 201510:25 PM

[SAN FRANCISCO] A start-up founded by two former Android executives wants to free smartphone users from worrying about how to fit another video or photo onto their devices.

Nextbit Systems Inc unveiled a smartphone called "Robin" on Tuesday that automatically manages file storage and backup to the cloud. Using software that works closely with Google Inc's Android operating system, Robin is designed to understand which files a user might want right away and which can be moved to the cloud. For example, an app for an airline that's accessed twice a year can be sent to the cloud to free up space for something else. And once the user needs the app again, it's easily retrieved without the need to reinstall it from the store or remember all the login information.

"In a way we can leverage the cloud to exceed the specs of your device," said Mike Chan, Nextbit's co-founder, who worked on several major Android releases. "We look at the system as a whole. We look at your usage patterns; we personalize this, really, for you."

Nextbit is betting that the global market, including the US, is ready for a new Android phone. In particular, the company is targeting consumers who don't want to ante up for high-end phones like the iPhone or the Samsung S6.

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Still, Nextbit will face huge challenges in one of the most competitive markets in the world, with competitors ready to tweak software and hardware to woo more customers. 

"There's a lot of things that can be done a lot better in terms of the software and experience," said Tom Moss, the company's other co-founder who was formerly in charge of business development at Android worldwide. "So we think both the OS and the devices are kind of stagnant."

The Robin is set to be widely available early next year for $399. The device includes some refined touches, such as a 13 megapixel rear camera with dual speakers and amplifiers. It also uses a fingerprint reader to activate the power button. The storage comes in at 32 gigabytes-but offers up to 100 gigabytes through the cloud service.

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India's RBI seeks change in how banks set lending rates

India's central bank issued draft guidelines on Tuesday for its proposed plan to change how banks calculate their lending rates, which would make them more responsive to monetary policy actions but would likely be opposed by the sector. 

PHOTO: BLOOMBERG

SEP 1, 20159:39 PM

[MUMBAI] India's central bank issued draft guidelines on Tuesday for its proposed plan to change how banks calculate their lending rates, which would make them more responsive to monetary policy actions but would likely be opposed by the sector.

Banks currently have a good degree of freedom in determining their lending rates, but that has created frustration among Reserve Bank of India officials, who believe the sector is seeking to protect profit margins and is therefore not passing on central bank rate cuts quickly enough.

The RBI has cut the country's main repo rate three times by a total of 75 basis points this year, but most banks have lowered their base lending rates by only around 30 basis points.

The RBI in April proposed that lenders start determining base rates using the so-called marginal cost of funds. Under this method, banks' lending rates would respond more quickly to money market rates, analysts said.

On Tuesday, the RBI unveiled the detailed draft guidelines on how banks should calculate their lending rates, and asked for feedback by Sept 15. The central bank wants to implement the measures by April of next year.

"For monetary transmission to occur, lending rates have to be sensitive to the policy rate," the RBI said in the release. "It was observed that base rates based on marginal cost of funds are more sensitive to changes in the policy rates."

But the move is likely to be opposed by banks, which say they need to maintain flexibility in setting lending rates because money market conditions can be volatile.

Banks have also maintained they are lowering their lending rates as soon as they can but are constrained because they must weigh how much they are receiving in deposits with interest they owe to customers and companies. "It is difficult to work on a marginal cost model because the term deposits are locked in for a specific time and can't be repriced as frequently as assets," said a state-run banker.

REUTERS

  
 

Opel Bank starts retail banking to diversify refinancing base

SEP 1, 20159:24 PM

[RUESSELSHEIM, Germany] General Motors' European carmaker Opel will push into online retail banking in Germany and use consumer deposits to broaden the base of its financing operation.

Opel already has 200,000 customers who use its in-house bank for car loans or leasing deals, and a push into online consumer banking will add more potential customers, the German carmaker said.

Up to a third of Opel Bank GmbH's refinancing needs may be covered through new deposits from the retail bank, Opel said.

Opel relaunched its own bank in April 2013 after the US group's financing subsidiary GM Financial Company bought back the European and other international operations it had sold during the financial crisis.

Depending on the success of the retail banking operations in Germany, Opel may consider further steps to launch consumer banking in other European markets, it said.

REUTERS

Chinese brokerage buys more shares as Beijing presses listed companies

China's major brokerage, Guotai Junan Securities, said on Tuesday that it will increase its equity fund dedicated to supporting markets - answering Beijing's call for listed firms to bolster their backing for struggling stock markets. 

PHOTO: REUTERS

SEP 1, 20152:59 PM

[SHANGHAI] China's major brokerage, Guotai Junan Securities, said on Tuesday that it will increase its equity fund dedicated to supporting markets - answering Beijing's call for listed firms to bolster their backing for struggling stock markets.

Guotai Junan's board agreed to use 20 per cent of its net assets for a fund dedicated to buying shares to support the market, up from 15 per cent currently, the brokerage said in an announcement posted on the Shanghai Stock Exchange website.

The announcement follows a joint statement issued late on Monday by China's major institutions charged with supervising financial markets, which encouraged listed firms to merge, offer cash dividends, and buy back shares to support the market.

The China Securities Regulatory Commission (CSRC) recently said it would allow market forces to play a greater role in equities trading, which many interpreted as a shift from an offensive strategy trying to restart a bull market to a defensive one trying to head off a further crash, but markets crashed shortly afterwards.

Since then regulators have appeared to return to intervention, both by signalling fresh funds from pensions were on their way into the stock market, and by attempting to persuade more investors to commit funds.

This is far from the first time the CSRC has tried to encourage share buybacks by listed firms, seen as a cheap way to inspire other investors to come back to market, but the tactic has rarely produced much noticeable long-term benefit. "It would only work if investors believed the government was willing to do whatever it takes, and the problem is they've already shown that they won't," said Julian Evans Pritchard of Capital Economics in Singapore. "These measures are inadequate. It's just trying to put out a big fire with a glass of water," said Yang Hai, strategist at Kaiyuan Securities.

Guotai shares in Shanghai were rose sharply on the resumption of afternoon trade following the announcement, up around 1.6 per cent for the day, and bank stocks also rose, but wider indexes remained down around two per cent. "The policies coming out of China with regards to its equity markets are a cat's cradle of contradictions," wrote Angus Nicholson of IG in Australia. "If one was a Chinese equity investor trying to invest with the government's intended policy direction, then one would be throwing one's hands up in confusion at this point."

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