Hi everyone! Welcome to the first commercial news update for June! We are still trying to keep our stories a little bit shorter and snappier for you all but do let us know what you think! Happy reading! Commercial News Update – 5th June 2019 Topics covered this week: Trump’s ‘Substantial Trade Deal’ with the UK @Jaysen The Google Antitrust Investigation @Moni Trump’s Tariffs on Mexico @Alice G Italy’s Debt @Sara Moon Trump’s “Substantial Trade Deal” with the UK @Jaysen The Story: President Trump called the UK-US special relationship the “greatest alliance the world has ever known” on day two of his state visit to the UK. The US president’s comments came during a joint press conference with Theresa May in which both leaders speculated on a trade deal between the UK and the US post-Brexit. Impact on Businesses and Law Firms: Ahead of his arrival to the UK, Trump weighed in on Brexit, suggesting the UK should just “walk away” from the EU. His comments didn’t help the financial markets, which dread the prospect of a no-deal Brexit. Uncertainty scares investors because it’s hard to price in risk and predict future earnings. It’s why last month the pound fell against the euro for 11 consecutive days, matching the record it set just before the financial crisis However, Trump’s promise to strike a “very, very substantial trade deal” with the UK could offer new opportunities for businesses. Lower tariffs, as well as looser trading rules and investment restrictions, may increase imports and exports (especially for key UK-US exports in chemicals, machinery and vehicles) and lead to more investment. Suppose, as a result of a UK-US trade deal, US businesses find it easier to acquire UK firms or that UK investors have an easier time raising finance from US lenders. Commercial law firms that are positioned on both sides of the Atlantic will be well prepared to deal with a rise in transactional work. Those that are not may struggle to break into the very competitive legal markets. Yet, despite all the promise, there are also many doubts and concerns over a UK-US trade deal. The UK prime minister won’t be leader for much longer, both countries are arguing over Huawei and there is no guarantee a trade deal will be agreed -- will Donald Trump be re-elected? What if we don’t have a hard Brexit? Do we prefer regulatory alignment with the US or the EU? The Google Antitrust Investigation @Moni The Story: On Monday 3rd June, several of the world’s largest technology companies, including Google, Facebook and Apple, saw their stocks tumble as reports circulated that the Justice Department, Federal Trade Commission and US House of Representatives were preparing sweeping antitrust investigations into large tech companies. Alphabet Inc stocks tumbled 6% following the report that the Justice Department would investigate Google’s search practices and its other businesses. While the Justice Department has yet to provide confirmation, the report stated that the department’s antitrust division has been laying the groundwork for the probe. Alphabet is one of the world’s five largest companies by market capitalization and is a major player in the advertising market. In addition to Google, the Justice Department and Federal Trade Commission will also be investigating Facebook, Amazon and Apple. Investor concerns were further stoked when, less than a day later, it was reported that House Democrats will be launching a separate “top-to-bottom” antitrust investigation of the tech industry. The investigations mark a turning point in a longstanding antitrust conversation regarding tech companies within the US, and it comes at a point where tech companies are under the spotlight regarding their role in the economy, politics and society more broadly. Depending on their outcomes, these antitrust investigations could leave the companies open to new regulatory scrutiny and lawsuits. Impact on Businesses and Law Firms: By investigating these tech giants, the federal government is taking on some of the world’s most popular companies which have spent the last decade building up their relationships in Washington. Google survived a previous investigation by the Federal Trade Commission who said that while they had concerns about anti-competitive behaviour, the company also had strong pro-competitive justifications for its actions. However, the investigations are being instigated on the back of several successful investigations by the European Union and at a particularly heated time in the political cycle. The decline in stock prices is an indicator that investors are not willing to shrug off the possibility of regulatory and legal scrutiny. The outcomes and nature of these investigations, especially the DoJ and FTC investigations, will largely shape the relationship between big tech and Washington for several years to come.