Googling an Antitrust Battle

Silicon Valley is preparing for battle. The region's dominant tech and software firms "are bracing for a tough new phase of antitrust scrutiny" from the United States and abroad, the Wall Street Journal reports this morning. In particular, Google (GOOG) and Intel (INTC) are stepping up their corporate lobbying efforts in response to an Obama administration that is adopting "a stricter stance against companies that dominate their sectors." Since March, Google operatives have been working inside the Beltway to get across the message that "its business practices don't reduce competition," the WSJ writes. Meanwhile, Intel, which got hit with a $1.45 billion fine from European regulators last week, has launched an ad blitz in Washington and Brussels to stress its hand in job creation. Why now? Because during the business-friendly Bush years, antitrust worries were a relatively minor concern for the rapidly expanding tech giants.  

Under the new regime, "the stakes appear to be highest for Google, the rising power of the Internet economy," the New York Times reports. The focus for antitrust investigators, the newspaper adds, will be on networks, any vital technology platform that commands a wide user base. The biggest, of course, is the Internet. So far, Google CEO Eric Schmidt, already tight with the president, has shrugged off perceived heightened oversight. "Information is incredibly important, and we should expect governments around the world to pay attention to what we do," Schmidt is quoted as saying in the NYT.

The planned merger of Porsche and Volkswagen came to a screeching halt this weekend with all future discussions postponed for now. The two sides met last week for the first of many planned meetings to assemble a super-structure to oversee operation of the iconic German car brands. It's an unwieldy group to say the least, including members of VW, Porsche, and a large contingent from the state government of Lower Saxony, which owns a minority stake in Volkswagen. The NYT's sources say that at the meeting, Porsche CEO Wendelin Wiedeking took a "high-handed" stance, souring already-fraught relations between the two groups. Now VW is talking tough. "There is currently no atmosphere for constructive talks," a VW spokeswoman told Bloomberg. Porsche, though, says negotiations will resume but offered no details.

"Go tech, young man" is the cry being embraced by Wal-Mart (WMT) this morning as it unveils a new focus on consumer electronics to meet the challenge laid down by Best Buy (BBY) and Amazon.com (AMZN), the WSJ reports. The reasons for Wal-Mart's new strategy are twofold. First, a lot more formerly affluent customers have started shopping at the company's stores. Second, with Circuit City out for the count, the Bentonville, Ark., retailer sees a large opportunity in the market that it can exploit.

Still on the retail beat, investors anxiously await Lowe's and Home Depot's latest earning results in the hope of signs that the free-falling housing market has finally hit bottom. But both home-improvement retailers "likely are to say that housing remains a troubled corner of the economy, with high foreclosure rates and weak housing turnover still hurting sales of everything from lawn mowers to lumber," the WSJ writes. Yet at least one analyst thinks that new figures out of California offer a ray of hope. So what both retailers project about their West Coast operations will be eagerly awaited.

Let's head to the corporate-crime section of the WSJ now and an explosive report (based on unnamed sources) that the "criminal investigation into who knew about Bernard L. Madoff's massive fraud has expanded to include some of his highest-profile investors [including] Jeffry Picower and Stanley Chais, two philanthropists who invested heavily with Mr. Madoff, and Carl Shapiro, one of the money manager's oldest friends." The suggestion from federal investigators is that "Picower and Chais told Mr. Madoff how much in returns they wanted. Their accounts soon would reflect those amounts," the WSJ writes. Both men already have been accused of seeking fictitious gains—"in some cases their returns reached 300% or 950% a year" in civil lawsuits filed by a trustee in the bankruptcy liquidation of Madoff's firm, Bernard L. Madoff Investment Securities LLC.

And, finally, business managers are losing sleep over the recession. Literally. A recent survey conducted across five countries reveals that managers are sleeping, on average, 19 percent less these days, with the current economic gloom cited most often as the reason for the recent chronic insomnia, the Financial Times reports. The survey was conducted by Philips, the Dutch health care and electronics group, which probably knows a thing or two about lost sleep: It's been living through a sales slump that's forced it to cut operating costs by 500 million euros ($671 million) this year.