The week in business: a step towards data privacy
What’s new? (13-19 Feb.)
Google Privacy Changes
Google announced on Wednesday that it plans to change its Android smartphone software to limit data sharing between apps and with third parties. The other major smartphone software provider, Apple, which has made privacy a selling point, announced new measures last year. But the two companies took different approaches. Apple allows customers to choose whether or not to block tracking, which has had a significant impact on companies that rely on customer data to target ads. Meta said this month that the changes will cost it $10 billion in ad revenue this year. Google, which unlike Apple makes most of its money from selling digital ads rather than devices, has promised its changes won’t be as disruptive. It plans to support its existing technologies for at least two more years to give advertisers a chance to prepare.
Americans keep shopping
Despite shortages of some products and hordes of workers sick from Omicron, Americans continued to shop last month. Retail sales in January rose 3.8% from the previous month, according to data released Wednesday by the Commerce Department. That’s a rebound after a sharp decline in December, when spending fell 2.5%. The new numbers don’t account for rapidly rising prices, and there are some data quirks to consider (gift cards received in December are often spent in January, for example), but economists said that the rebound was always a good sign for the economy. In another sign of consumer spending resilience, Walmart said on Thursday it beat earnings expectations last quarter, though as the nation’s largest grocery chain it is particularly sensitive to inflation and rising wages. Macy’s, Home Depot and Lowe’s report earnings this week.
The Chinese version of the Olympic Games
The Winter Olympics, which end on Sunday, looked rosier on social media than it did in person. China has used bots, fake accounts, genuine influencers and other tools to push its narrative of the Games (a feel-good success of an event) and downplay other aspects (like boycott calls of the Games on the country’s human rights violations). Some of these efforts were aimed at foreign viewers. Inside China, the state has more power of curation. The men’s hockey game between the United States and China, which the American team won 8-0, was not broadcast, for example, on the main public sports television channel. Brown, snowless mountains were blanked out by state media. And an appearance by Peng Shuai, the professional tennis player who disappeared after accusing a senior Communist Party leader of sexually assaulting her, was not mentioned.
And after? (20-26 Feb.)
The energy impact of an invasion
President Biden said Thursday that a Russian invasion of Ukraine remains a “very high” possibility. And that’s not good news for energy markets. An invasion could drive up oil and natural gas prices, prolong high inflation and affect global financial markets. Countries that depend on Russia for energy could be particularly susceptible to economic repercussions. In 2021, 38% of the natural gas used by the European Union came from Russia, according to research organization Bruegel. If the flow of natural gas is interrupted, businesses could be forced to close and household bills, already higher than usual, could continue to rise.