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📈 Britain vs. Google: Levelling the Digital Field

Reeves' Relief: Inflation Falls, Markets Hold Breath

January 15, 2025

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This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Britain vs. Google: Levelling the Digital Field

  • Reeves' Relief: Inflation Falls, Markets Hold Breath

  • Zuckerberg Cuts, AI Pushes Forward

The summary: The CMA's investigation into Google’s search dominance aims to level the playing field, ensuring fair competition, better choices, and a dash of digital democracy for all.

The details:

  • Google's Gripping Monopoly: The UK's Competition and Markets Authority (CMA) has launched an investigation into Google's dominant 90% share of UK web searches, questioning if it's stifling competition and limiting user choices.

  • Flexing New Muscles: This is the CMA's maiden probe using fresh powers to tackle firms with "strategic market status," aiming to ensure Google plays fair and fosters a healthy competitive environment.

  • Google's Cautious Cooperation: While Google promises to cooperate, it's wary of overly strict digital rules. The tech giant insists on balancing new regulations with delivering cutting-edge services.

  • Global Scrutiny: With similar investigations worldwide, including a US push for Google to sell Chrome, the CMA could enforce data-sharing or more oversight on AI data use, aiming for fairer digital market play.

Why it matters: Google's dominance in search impacts how we find information and influences which businesses thrive or dive in the digital marketplace. The CMA’s scrutiny aims to ensure we’re not stuck in a one-horse race, fostering a healthier, more competitive landscape. If Google’s grip loosens, it could mean more choices, fairer data practices, and a chance for smaller players to shine—keeping the tech giant on its toes.

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The summary: A surprise dip in inflation brings a brief cheer, but with fiscal challenges looming and the ever-present influence of the US, the UK’s economic tightrope walk continues.

The details:

  • December's CPI inflation dipped slightly to 2.5%, unexpectedly cheering Rachel Reeves amidst the ongoing scrutiny over rising borrowing costs and a wobbling pound.

  • Core inflation and services inflation saw larger-than-expected drops, fueling speculation of an imminent Bank of England rate cut, as markets basked in this unexpected respite.

  • Borrowing costs eased, but the chancellor faces the looming challenge of fiscal rules under threat and tough spending decisions if the OBR spreadsheet goes awry.

  • Despite the current optimism, future inflation is projected to rise, and the UK remains tethered to the economic whims of the US, with potential trade turbulence on the horizon.

Why it matters: A tiny dip in inflation gives Rachel Reeves a rare chance to breathe, but the looming fiscal juggle means she’s not out of the woods yet. With markets nervously watching, any hint of economic wobble could tip the scales, making or breaking the government’s claims of stability. And let's not forget, as the US sneezes, the UK still reaches for a tissue—every twist across the pond could send ripples through British markets.

The summary: Zuckerberg’s shaking things up at Meta with a 5% workforce trim, a dash of free speech, and a sprinkle of AI, all while offering severance and a "bigger, better" 2025—so hold onto your hats!

The details:

  • Meta’s about to drop 5% of its global workforce, with Zuckerberg keen to "move out low-performers faster," making 3,600 jobs potentially disappear.

  • The cuts come alongside Meta’s new ‘free speech’ priority, which involves axing third-party factcheckers and diversity programmes—presumably for more "authentic" content (and chaos).

  • Employees in the US will get the bad news by 10 February, with the rest of the globe to follow suit later.

  • In classic Zuckerberg fashion, the cuts come with a silver lining: "generous severance" and a future focus on AI, presumably to find the next round of "best people" who don’t need factchecking.

Why it matters: Zuckerberg’s mass cull and focus on "free speech" might turn Meta’s platforms into a bit of a Wild West—less factchecking, more user opinions. It’s a bold move to streamline his workforce, but considering the AI push, we might just see more robots telling us what’s true. Meanwhile, if you’re a Meta employee, start practising your "generous severance" dance; it’s about to get very intense.