FirstFT: EU to hit Apple with €500mn antitrust fine

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Good morning. We start the week with an exclusive story on a move by the EU that could reignite its war against Big Tech.

The bloc is to impose its first fine on tech giant Apple for allegedly breaking EU law over access to its music streaming services, according to five people with direct knowledge of the long-running investigation.

The fine, which is in the region of €500mn and is expected to be announced early next month, is the culmination of a European Commission antitrust probe into whether Apple has used its own platform to favour its services over those of competitors.

The probe is investigating whether Apple blocked apps from informing iPhone users of cheaper alternatives to access music subscriptions outside the App Store. It was launched after music-streaming app Spotify made a formal complaint to regulators in 2019. Javier Espinoza has more details from Brussels on the commission’s case.

• EU policy: Australian mining billionaire Andrew Forrest has slammed Germany for its U-turn against EU legislation that would punish companies for environmental and human rights abuses in their supply chains.

And here’s what else I’m keeping tabs on today:

• JPMorgan: A trial of five climate activists alleged to have vandalised the bank’s London offices, which starts today, could become a pivotal case for the use of law in England and Wales.

• Economic data: Germany’s central bank publishes its monthly report, Sweden reports its consumer price index for January and Rightmove has its UK house price index.

• Markets: Financial markets in the US are closed for the Presidents’ Day holiday. Bourses reopened in China today following the lunar new year break.

• Results: Ferretti, MoneySuperMarket.com and Wilmington report.

Five more top stories

1. Joe Biden has blamed Russia’s first major battlefield victory in Ukraine in nearly a year on the US Congress for failing to pass a bill funding Kyiv’s army. The US president told his Ukrainian counterpart Volodymyr Zelenskyy that “Ukrainian soldiers had to ration ammunition due to dwindling supplies as a result of congressional inaction”, according to a White House readout. Here’s more from the leaders’ weekend call.

• Russian assets: Kaja Kallas, the Estonian prime minister, told the Financial Times that the west should seize Russia’s frozen assets before the US election.

• Munich Security Conference: The three-day event was marked by a recognition that Ukraine badly needed more arms and a fear that the war was tipping in Moscow’s favour.

• Alexei Navalny: Allies of the late opposition activist have accused Russian authorities of covering up his death as police arrested people attending spontaneous gatherings in his memory.

2. Exclusive: A senior banker has alleged that Morgan Stanley manufactured his job title to dupe European regulators into believing the bank had moved top staff to Frankfurt to comply with post-Brexit rules. The banker was made an executive director and formally named “head of loan trading” but was instructed early on not to actively use that title, which a superior told him “only existed on paper”. Olaf Storbeck has more details from Frankfurt.

3. Exclusive: The US and its allies will take action if China tries to dump goods on international markets to ease its industrial overcapacity problem, senior Treasury officials told the FT. They said a US delegation made clear its concerns in a recent visit to China, including in conversations with He Lifeng, the vice-premier responsible for China’s economy. Read the full story.

• More US-China: The FBI is “laser focused” on Chinese efforts to insert malicious software code into computer networks in ways that could disrupt critical US infrastructure, according to the agency’s director.

4. Israel’s cabinet has rejected any “international diktats” to recognise a Palestinian state, unanimously voting yesterday to declare that any settlement would come “solely through direct negotiations between the parties, without preconditions”. The statement added that any recognition of Palestinian statehood in the wake of Hamas’s October 7 attacks on Israel “would give a huge reward to unprecedented terrorism”.

• Israel’s far right: Once seen as fringe extremists, a pair of religious Zionist ministers who live in settlements in the occupied West Bank now wield enormous influence.

• UK Labour: Sir Keir Starmer did not rule out his party supporting a motion to back an “immediate” ceasefire in Gaza at an upcoming House of Commons vote.

5. Exclusive: The US is luring a record amount of capital investment from German companies attracted by its strong economy and lucrative tax incentives, just as conditions in their home market and China, their largest trading partner, are worsening. German companies announced a record $15.7bn of capital commitments in US projects last year, up from $8.2bn a year earlier. Here’s more from the data compiled by fDi Markets.

The Big Read

To his advocates, Gary Gensler has been a fearless protector of investors and the markets since he became chair of the US Securities and Exchange Commission in 2021. Gensler has undertaken a sweeping reassessment of rules that have underpinned US markets for decades, just as the industry is adapting to new technologies, asset classes and market participants. But his reforms and tough stance on enforcement, with targets ranging from top investment banks to upstart crypto exchanges, have antagonised some on Wall Street.

We’re also reading . . . 

• RedBird: Gerry Cardinale, the man who built the $10bn private equity group behind several high-profile media and sport takeovers, speaks to the FT.

• NatWest: While it made sense nine months ago, Patrick Jenkins explains why the UK government’s plan for a mass-market sale of the bank’s stock is now a bad idea.

• Russia’s Gazprom: The state-run monopoly’s business model is in tatters after Europe, its biggest market, started cutting Russian gas imports in the wake of the Ukraine war.

• Biden 2.0?: Europe has been pondering a response to Trump 2.0, writes Rana Foroohar, but it needs a plan for a Democratic election victory as well.

The FT has launched its new US Election Countdown newsletter. Join the FT’s Washington reporter Steff Chávez for your essential guide to the twists and turns of the most significant election for decades. Sign up here.

Chart of the day

The riskiest US corporate bonds have come under pressure this year, setting them apart from a rally across broader debt markets. The spread for triple C-rated bonds — meaning the premium that those lowly-rated borrowers must pay to issue debt over the US Treasury — has ballooned.

Take a break from the news

Christopher Nolan’s Oppenheimer proved the biggest winner at the 2024 Bafta Film Awards in London, clinching seven Baftas in total over the weekend, including the award for best film. But Barbie, the other half of “Barbenheimer”, received no prizes despite five nominations. Danny Leigh sums up a night long on glitz but otherwise short on surprises.

Additional contributions from Benjamin Wilhelm