McConnell Pushes Against Stimulus Deal – The New York Times

Credit…Anna Moneymaker for The New York Times

Senator Mitch McConnell, Republican of Kentucky and the majority leader, told Republican senators privately on Tuesday that he has advised the White House not to strike a deal with Speaker Nancy Pelosi on a new stimulus bill before Election Day, cautioning against reaching an agreement that most in the party cannot accept.

Mr. McConnell’s counsel, confirmed by three Republicans familiar with his remarks, threw cold water on President Trump’s increasingly urgent push to enact a fresh round of pandemic aid before he faces voters on Nov. 3. It came just before Ms. Pelosi’s spokesman gave an upbeat assessment of talks on Tuesday between her and Steven Mnuchin, the Treasury secretary, saying they had found “common ground as they move closer to an agreement.”

Ms. Pelosi had said earlier on Tuesday that she was “optimistic” a deal could be reached with the Trump administration in the coming days. But Mr. McConnell’s remarks underscored the divisions among Republicans that have long hampered a compromise, and which have broken out into an extraordinarily open intraparty feud just two weeks before the election.

Republicans are growing increasingly anxious that Mr. Trump and his team are too eager to reach a multitrillion-dollar agreement and are conceding far too much to the Democrats. They fear that a vote on any large bipartisan stimulus would force colleagues who are up for re-election into a difficult choice of defying the president or alienating their fiscally conservative base by embracing the big-spending bill he has demanded.

Senate Republicans were also concerned that any vote on such a package could interfere with the Senate’s hasty timetable for confirming Judge Amy Coney Barrett to the Supreme Court by early next week. Mr. McConnell said he told the White House he was particularly concerned a deal before then could inject unwanted unpredictability into the schedule, according to the Republicans, who requested anonymity because they were not authorized to discuss a closed party luncheon.

Mr. McConnell made it clear that he knew his counsel was likely to leak, making reference to the possibility that his remarks could appear in the news media, two of the Republicans said.

A short time later, outside the hearing room where Republicans met privately, Mr. McConnell told reporters the Senate would consider a broad bipartisan stimulus deal if the White House and Democrats struck one. But he would not say if it would hold a vote before Election Day, and members of his leadership team have warned that Republican votes could be hard to come by in the chamber.

“If a presidentially supported bill clears the House, at some point we’ll bring it to the floor,” he said, without elaborating on the timetable.

He made his comments around the same time that Ms. Pelosi and Mr. Mnuchin were speaking by phone, in what Drew Hammill, Ms. Pelosi’s spokesman, described as a productive discussion that would continue on Wednesday. He said her target of reaching a deal by the end of the day had yielded progress.

“Today’s deadline enabled the speaker and secretary to see that decisions could be reached and language could be exchanged, demonstrating that both sides are serious about finding a compromise,” Mr. Hammill wrote on Twitter.

Yet Mr. McConnell was pursuing a different track. He forced a test vote Tuesday afternoon on a narrow measure that would revive the Paycheck Protection Program, a popular small-business loan program. While Democrats support the program, most of them opposed the narrow bill, contending that a far broader package was needed. It received support from a majority of senators, 57-40, but fell short of the 60 votes that most major legislation needs to advance.

  • Stocks on Wall Street rose on Tuesday, though trading was turbulent as investors reacted to developments between Democrats and Republicans over a new economic stimulus package.

  • After rising nearly 1.5 percent the S&P 500 gave back much of those gains late in the afternoon to end about half a percent higher. Speaker Nancy Pelosi had set Tuesday as a deadline for reaching an agreement on a package, but earlier in the day she suggested that she might be willing to extend that timeline.

  • Investors have watched the on-again, off-again talks closely in recent weeks, holding out hope for government spending that would support jobless Americans, small businesses, industries that have been hit hardest by the coronavirus pandemic, and state and local governments.

  • Stocks had received an early afternoon lift, following Ms. Pelosi’s appearance on Bloomberg Television, during which she sounded optimistic notes on the possibility of striking a deal on additional stimulus before the election.

  • But it was later reported that Senator Mitch McConnell, Republican of Kentucky and the majority leader, advised the White House not to strike a deal before Election Day.

  • The odds remained long that Democrats and the Trump administration could enact a plan before the Nov. 3 election. If differences over funding levels and policy issues could be resolved, there are still Senate Republicans to contend with, who are unlikely to approve a spending package as large as the one under discussion.

  • Shares of the big tech companies rose even as the Department of Justice filed an antitrust lawsuit against Google, accusing the company of maintaining an illegal monopoly over search and search advertising. The suit had been widely expected. Shares of Alphabet, Google’s parent company, were up more than 1 percent.

  • Some European stock indexes were pushed higher on Tuesday by a spate of positive earnings, which helped quell anxiety in markets about rising coronavirus cases and new social restrictions, including national lockdowns in Ireland and Wales. Reckitt Benckiser, the British owner of cleaning brands such as Dettol and Lysol, reported a jump in revenue on Tuesday. Logitech, which makes other computer hardware such as keyboards, said its quarterly sales exceeded $1 billion for the first time in the three months that ended in September.

Credit…John Taggart for The New York Times

The Justice Department accused Google of maintaining an illegal monopoly over search and search advertising, in the government’s most significant legal challenge to a tech company’s market power in a generation.

In a lawsuit, filed in a federal court in Washington, D.C., on Tuesday, the agency accused Google, a unit of Alphabet, of using several exclusive business contracts and agreements to lock out competition.

Such contracts include Google’s payment of billions of dollars to Apple to place the Google search engine as the default for iPhones. By using contracts to maintain its monopoly, the suit says, competition and innovation has suffered.

Google responded by describing the lawsuit as “deeply flawed.”

“This lawsuit would do nothing to help consumers,” the company said in a statement on its website. “To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

Attorney General William P. Barr, who was appointed by President Trump, has played an unusually active role in the investigation. He pushed career Justice Department attorneys to bring the case by the end of September, prompting pushback from lawyers who wanted more time and complained of political influence. Mr. Barr has spoken publicly about the inquiry for months and set tight deadlines for the prosecutors leading the effort.

The lawsuit may stretch on for years and could set off a cascade of other antitrust lawsuits from state attorneys general. About four dozen states and jurisdictions have conducted parallel investigations and are expected to bring separate complaints against the company’s grip on technology for online advertising.

A victory for the government could remake one of America’s most recognizable companies and the internet economy that it has helped define since it was founded by two Stanford University graduate students in 1998.

But Google has long denied accusations of antitrust violations and is expected to fight the government’s efforts by using a global network of lawyers, economists and lobbyists. Alphabet, valued at $1.04 trillion and with cash reserves of $120 billion, has fought similar antitrust lawsuits in Europe.

Credit…Patrick Semansky/Associated Press

One of the fronts in the Justice Department’s case against Google is a 13-year-old agreement between Apple and Google that has evolved into a multibillion-dollar deal with enormous consequences for both companies and many of their rivals.

When Apple introduced the iPhone in 2007, Google was the device’s default search engine. In return, Google paid Apple a chunk of the ad revenue it collected from the millions of Google searches conducted on iPhones.

Today that arrangement covers all Apple devices, which now account for nearly half of all Google search traffic, according to the Justice Department’s lawsuit. As a result, Google pays Apple an estimated $8 billion to $12 billion a year, according to the suit. That has made Apple and Google hugely reliant on one another, while edging out other search engines and, according to the U.S. government, protecting Google’s monopoly.

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“By paying Apple a portion of the monopoly rents extracted from advertisers, Google has aligned Apple’s financial incentives with its own and set the price of bidding for distribution extraordinarily high — in the billions,” the Justice Department said in its lawsuit.

With billions of dollars on the line, the partnership is critical to both companies.

Google officials said they weren’t aware of the Justice Department’s “Code Red” allegation and that the company’s deal with Apple is no different than Coca-Cola paying a supermarket for prominent shelf space.

Apple did not immediately respond to a request for comment.

Credit…Pool photo by Olivier Douliery

The United States on Tuesday accused Google, a unit of Alphabet, of illegally maintaining a monopoly over search through several exclusive business contracts and agreements that lock out competition.

At a press briefing Tuesday morning, Deputy U.S. Attorney General Jeffrey A. Rosen outlined the rationale behind the case.

  • Mr. Rosen hailed the Google lawsuit as a “milestone” in the Justice Department’s efforts to foster competition in the internet markets, but he emphasized that this was not a stopping point — suggesting that the D.O.J. may continue to pursue other monopoly cases of technology companies.

  • Mr. Rosen said that Google “has maintained its monopoly power through exclusionary practices that are harmful to competition.”

  • “Google is the gateway to the internet and a search advertising behemoth,” he said.

  • Mr. Rosen said the Google lawsuit had “nothing to do” with complaints from President Trump and other Republicans that technology companies exercise political bias in policing speech on their platforms, calling it a separate worry from these “competitive concerns in the marketplace.”

  • The Justice Department lawyers were guarded about many aspects of the investigation, including their conversations with the company and whether they considered building out the case into other parts of Google’s business or their conversations with the company. They specifically avoided answering a question about whether the D.O.J. spoke to Larry Page, Google’s co-founder and former chief executive of its parent company, Alphabet.

  • The lawyers stopped short of calling for specific relief, such as pulling apart pieces of Google’s conglomerate of business lines. Remedies such as divestitures are typically reached further along in a case, experts say.

Credit…Kathy Willens/Associated Press

Seven states may soon file a separate antitrust lawsuit against Google, the New York attorney general, Letitia James, announced on Tuesday. That’s in addition to the 11 states that joined the U.S. Department of Justice on Tuesday in filing a lawsuit against Google, accusing it of maintaining an illegal monopoly over search and search advertising.

The attorneys general in the states that signed on to the Justice Department suit are all Republican. Ms. James and the attorneys general of Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah said in a joint statement that they had been conducting separate but parallel bipartisan investigations into Google’s anticompetitive market behavior over the last year.

“This is a historic time for both federal and state antitrust authorities, as we work to protect competition and innovation in our technology markets,” the statement read. “We plan to conclude parts of our investigation of Google in the coming weeks.”

If the states decide to go ahead with the complaint, they would file a motion to consolidate their case with the Department of Justice’s lawsuit, and proceed to litigate the case cooperatively.

Credit…T.J. Kirkpatrick for The New York Times

Attorney General William P. Barr has played an unusually active role in the investigation that led to the antitrust lawsuit that the Justice Department filed against Google on Tuesday.

He pushed prosecutors to wrap up their inquiries — and decide whether to bring a case — before Election Day. Most of the roughly 40 lawyers building the case had said they opposed bringing a complaint by Mr. Barr’s Sept. 30 deadline. Some said they would not sign the complaint, and several left the case this summer.

Mr. Barr, a former telecom executive at Verizon who once argued an antitrust case before the Supreme Court, signaled that he would put the tech giants under new scrutiny at his confirmation hearing in early 2019. He said that “a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers.”

Since then he has taken a hands-on approach to the investigation, putting it under the control of his deputy, Jeffrey Rosen, who in turn hired an aide from a major law firm to oversee the case and other technology matters. Mr. Barr’s grip over the case tightened when the head of the Justice Department’s antitrust division, Makan Delrahim, recused himself from the investigation because he represented Google in its acquisition of the ad service DoubleClick in 2007.

In a blog post, Google called the lawsuit “deeply flawed” and said that it would not help consumers. The Trump administration has attacked Google, which owns YouTube, and other online platform companies as being slanted against conservative views.

The lawsuit is likely to outlast the Trump administration. The Justice Department spent more than a decade taking on Microsoft. The agency filed its lawsuit against the company in 1998 and the settlement was approved in 2002.

While it is possible that a new Democratic administration would review the strategy behind the case, experts said it was unlikely that it would be withdrawn under new leadership.

The Department of Justice sued Google on Tuesday, accusing the tech giant of maintaining an illegal monopoly over search and search advertising. The lawsuit, filed in a federal court in Washington, D.C., on Tuesday, is the government’s most significant legal challenge to a tech company’s market power in a generation.

Here’s how business leaders, policymakers, academics and antitrust experts are reacting to the news.

  • Senator Josh Hawley, Republican of Missouri, who launched an antitrust investigation of Google when he was Missouri’s attorney general, wrote on twitter: “I applaud this suit as desperately needed and long overdue. #BigTech’s free pass is over.”

  • David Cicilline, a Democratic congressman and the chairman of the House Judiciary antitrust subcommittee, said in a tweet that he released a report three weeks ago detailing steps Google had taken to maintain and expand its monopoly power. “This step is long overdue,” he wrote, referring to the lawsuit. “It is time to restore competition online.”

  • Senator Tom Cotton, Republican of Arkansas, tweeted that Google’s “anticompetitive conduct is harming the public and American business,” and praised the Justice Department for “finally holding Google accountable.”

  • Tim Wu, a professor at Columbia Law School who specializes in antitrust issues, pointed out in a Twitter post that the Justice Department’s case against Google is similar to its case against Microsoft:

  • Avery Gardiner, a consumer advocate and a senior fellow at the Center for Democracy and Technology, a nonprofit organization focused on influencing technology policy, wrote on Twitter that the Department of Justice’s statistics show that it “didn’t bring even a single case for alleged abuse of monopoly power” from 2010 to 2020, except for in 2011 when there was one case.

  • Luther Lowe, senior vice president of public policy at Yelp, in his tweet warned against characterizing the lawsuit as a “partisan vendetta by the Trump Administration”:

  • George Slover, senior policy counsel at Consumer Reports, said that the increasing dominance of platforms like Google over digital commerce and communications is concerning for people across the political spectrum. “These powerful online platforms that connect us all on the internet must be held accountable, and competition must be protected,” Mr. Slover said in a statement.

  • Representative Jim Jordan, Republican from Ohio, applauded Attorney General William P. Barr’s decision to file the lawsuit in his tweet about the Google suit:

The Justice Department on Tuesday filed an antitrust lawsuit against Google, accusing the company of maintaining an illegal monopoly over search and search advertising.

The government was joined by 11 states, all with Republican attorneys general: Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

Credit…Tsering Topgyal/Associated Press

Shortly after the Department of Justice filed its antitrust lawsuit against Google on Tuesday, the company’s top executives sent emails to its employees with a message: Stay focused.

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And for Google, that means don’t go blabbing about antitrust issues.

“While we can expect some tough criticism and even misleading claims about our work, it’s important not to get distracted by this process, including speculating on legal issues internally or externally,” Kent Walker, Google’s chief legal officer, wrote in an internal email viewed by The New York Times.

Mr. Walker repeated his public statements that the case is “deeply flawed” and that Google is confident that the Justice Department’s complaint “doesn’t square with the facts of the law.” He noted that lots of successful companies have faced similar lawsuits and questions in the past.

In a separate email, Sundar Pichai, Google’s chief executive, urged Googlers to stay focused on their work so that users will continue to use its products, not because they have to but because they want to.

“Scrutiny is nothing new for Google, and we look forward to presenting our case,” Mr. Pichai wrote. “I’ve had Googlers ask me how they can help, and my answer is simple: Keep doing what you’re doing.”

Credit…Pool photo by Graeme Jennings

The Justice Department’s antitrust lawsuit against Google comes two weeks after Democratic lawmakers on the House Judiciary Committee released a sprawling report on the tech giants that accused Google of having a monopoly over online search and the ads that come up when users enter a query.

“A significant number of entities — spanning major public corporations, small businesses and entrepreneurs — depend on Google for traffic, and no alternate search engine serves as a substitute,” the report said.

The lawmakers also accused Apple, Amazon and Facebook of abusing their market power. The scrutiny reflects how Google has become a dominant player in communications, commerce and media over the last two decades. It controls 90 percent of the market for online searches, according to one estimate. That business is lucrative: Last year, Google brought in $34.3 billion in search revenue in the United States, according to the research firm eMarketer. That figure is expected to grow to $42.5 billion by 2022, the firm said.

In the 449-page report, lawmakers said the four companies had turned from “scrappy” start-ups into “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”

To mend the inequities, the lawmakers recommended restoring competition by effectively breaking up the companies, emboldening the agencies that police market concentration and throwing up hurdles for the companies to acquire start-ups. They also proposed reforming antitrust laws, in the biggest potential shift since the Hart-Scott-Rodino Antitrust Improvements Act of 1976 created stronger reviews of big mergers.

In a lengthy post on Google’s website on Tuesday, Kent Walker, senior vice president of global affairs, set out the company’s response to the Justice Department’s lawsuit, which he labeled “deeply flawed.”

“This lawsuit would do nothing to help consumers,” Mr. Walker wrote. “To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

The post detailed Google’s rebuttals to the suit:

  • Google’s agreements with Apple and other device makers and carriers to surface its search product were no different from those that many other companies have, it said. “Other search engines, including Microsoft’s Bing, compete with us for these agreements,” Mr. Walker wrote.

  • Consumers are using Google because they want to, not because they have to, the company said. It said other search engines, such as Bing or Safari, were easily available for download if people chose to use them instead.

  • Mr. Walker said in the post that the lawsuit was wrong about how Americans use the internet. “It claims that we compete only with other general search engines. But that’s demonstrably wrong. People find information in lots of ways: They look for news on Twitter, flights on Kayak and Expedia, restaurants on OpenTable, recommendations on Instagram and Pinterest,” he wrote.

Credit…Aimee Spinks/Netflix

The pandemic bump is over. Netflix attracted 2.2 million new subscribers for the third quarter, about one million lower than what investors were expecting and short of the 2.5 million Netflix itself had forecast, the company reported Tuesday.

Netflix also said it expected a slowdown for the fourth quarter, with about six million new customers, again lower than the 6.6 million analysts were anticipating.

Chalk it up to the pandemic. Consumer interest in Netflix accelerated earlier in the year as households in lockdown streamed films and shows more than usual, giving the company a record number of new subscribers. Another way to think about it: The coronavirus spike ate into the third quarter’s results.

Still, Netflix expects to close 2020 with a record number of new customers, about 34 million, giving it about 201 million subscribers around the world. The company doesn’t offer any guidance for U.S. subscribers but based on historical data, it could end up with 68 million by the end of the year.

Here are the other highlights:

Business is good. It’s just not as good as investors thought. The company reported that it made $790 million on $6.4 billion in revenue. Investors were looking for $967 million in earnings on $6.3 billion in sales. But the more telling figure is the number of customers Netflix expects in the fourth quarter (see above), which is below what investors were estimating. Shares fell about 6 percent in after-hours trading.

“Free cash flow.” That’s the measure of how much money is going in (or out) the door. For years, Netflix has had “negative free cash flow,” meaning it was losing billions of dollars annually. But this year, the company has seen positive results, about $2.2 billion so far, partly because of the pandemic. As productions shuttered, Netflix held on to more of its cash. That is likely to change next year, when studio work is expected to ramp up. Netflix expects to burn through as much as $1 billion in 2021.

What’s popular on Netflix? The company reported that “The Old Guard,” a film starring Charlize Theron and directed by Gina Prince-Bythewood, was the most watched title in the third quarter, with 78 million households watching. Another movie, “Enola Holmes,” starring Millie Bobby Brown, a star of “Stranger Things,” drew approximately 76 million households. On the series front, 48 million watched “Ratched,” from the producer Ryan Murphy, and 43 million streamed “The Umbrella Academy.”

Credit…Frederic J. Brown/Agence France-Presse — Getty Images

Snap, the parent company of Snapchat, reported a surge in quarterly revenue on Tuesday, as more users flocked to the social messaging app, though it continued to lose money.

Snap said revenue for the third quarter was $678 million, up 52 percent from a year ago, exceeding analysts’ estimates of $559 million. While some analysts had predicted that Snap’s growth would tail off as people returned to school, its number of daily active users rose 18 percent to 249 million.

But the company posted a net loss of nearly $200 million in the quarter, narrower than the loss of $227 million a year ago. The company’s stock jumped on the news.

As shutdowns caused by the coronavirus pandemic have continued, Snap has focused on introducing more shopping experiences in augmented reality, allowing people to try on clothes using filters in the app.

“Our focus on delivering value for our community and advertising partners is yielding positive results during this challenging time,” Evan Spiegel, Snap’s chief executive, said in a statement. “The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us.”

Credit…Justin Lane/EPA, via Shutterstock

Morgan Stanley’s two most senior commodities executives are leaving the firm after the bank caught them using the encryption app WhatsApp against company policy and failing to monitor other employees’ use of unauthorized communication channels, according to a person familiar with the bank’s operations who was not authorized to speak publicly.

The news was reported earlier by Bloomberg News.

An internal review by the bank found that Nancy King, the global head of commodities, and Jay Rubenstein, head of Morgan Stanley’s commodities trading operations, had communicated over WhatsApp and had not stopped their employees in the division from using other platforms that Morgan Stanley has outlawed, the person said.

Neither Ms. King nor Mr. Rubenstein could be reached to comment.

Morgan Stanley found no evidence that anyone in its commodities division had engaged in wrongdoing while using the forbidden communication platforms, the person said.

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Nevertheless, the division is being restructured. Its new leaders will be Jay Hallik and Jakob Horder, two executives who oversee fixed income trading at the bank. Ms. King is retiring from the firm, while Mr. Rubenstein is leaving.

The bank prohibits the use of certain apps and devices for communications related to sales and trading because it cannot see what is being said on them. Regulators require banks to monitor their employees’ messages to ensure that they are not doing anything illegal.

In the past, Wall Street traders have used chat platforms to skirt financial regulations. Over the past decade, for instance, authorities in the United States and the United Kingdom have filed criminal charges against major Wall Street banks after their traders were caught using instant messaging apps to make secret deals to manipulate markets in interest rates, foreign currencies and metals.

Credit…Nick Oxford/Reuters

Pioneer Natural Resources, a leading shale oil producer, said on Tuesday that it would buy Parsley Energy for $4.5 billion to expand its operations in the Permian Basin, the oil field that straddles West Texas and New Mexico.

A day earlier, ConocoPhillips announced that it was acquiring Concho Resources, another Permian producer, for $9.7 billion. These and other acquisitions signal that oil and gas companies are looking for ways to cut costs because they do not anticipate a quick recovery in demand for their products, which tumbled this spring when the pandemic took hold.

Pioneer Natural Resources and Parsley have some of the most productive shale assets in the Permian, and have long been considered natural partners. Scott Sheffield, Pioneer’s chief executive, is the father of Bryan Sheffield, Parsley’s chairman. Parsley’s current chief executive, Matt Gallagher, is a former Pioneer executive.

The two companies control fields that are near each other, which should make it easier for them to cut costs.

Scott Sheffield said the combination would “transform the investing landscape by creating a company of unique scale and quality.”

The total value of the deal is roughly $7.6 billion when Parsley’s debt is included.

Parsley’s share price closed up by more than 5 percent on Tuesday, while Pioneer’s shares closed down 4 percent.

Other recent deals in the oil industry include Chevron’s takeover of Noble Energy and Devon Energy’s proposed acquisition of WPX Energy.

Many of the deals involve companies that operate in and around the Permian, which became the world’s most productive oil field before the pandemic and has helped turn the United States into a major oil exporter. But many shale companies had problems turning a profit even before the spread of the coronavirus helped drive down oil prices to around $40 a barrel. By combining companies, executives are hoping to reduce drilling, transportation and labor costs.

Credit…Ralph Orlowski/Reuters

The German auto industry is bouncing back strongly from the pandemic as customers make purchases they postponed earlier in the year, earnings reports by BMW and Daimler indicate. Strong economic growth in China, a crucial market for both vehicle makers, has also helped.

But analysts say the miniboom may not last. Infections in Europe and the United States are surging, endangering sales in those two essential car markets. The profit figures “look too good to be sustainable,” Tim Rokossa, an analyst at Deutsche Bank, said in a note, referring to Daimler.

BMW said late Monday that its free cash flow, a measure of profit, quadrupled to 3 billion euros, or $3.6 billion, in the third quarter compared to the same period last year. Daimler said last week that operating profit rose to €3 billion in the quarter from €2.7 billion a year earlier.

Neither company disclosed net profit in the preliminary earnings reports. Daimler will issue a detailed earnings report on Friday and BMW will do so on Nov. 4.

German carmakers have a strong influence on the economic fate of Europe. Cars and trucks are Germany’s biggest export, and German carmakers buy components from all over the continent.

Credit…Justin Tallis/Agence France-Presse — Getty Images

While Britain struggles to get its national test-and-trace system running more efficiently, travelers will be able to get rapid coronavirus tests at an airport for the first time. Fliers leaving Heathrow Airport in London can get a rapid test for 80 pounds ($104). Starting Tuesday, people going to Hong Kong can take a pre-departure test to meet entry requirements there, the airport said.

The service will initially be offered for four weeks and passengers must book it ahead of time. The tests will be done by private-sector nurses, with results expected within an hour.

Heathrow, Britain’s largest airport, has been urging the government to allow it to offer more testing, particularly to arrivals, in an effort to boost travel. Heathrow argues that on-site testing would limit the need for two-week quarantines for people arriving in Britain. Government ministers have disagreed.

As an international hub, Heathrow Airport typically sees more than 80 million passengers a year. But during the pandemic, governments have introduced a range of travel restrictions, and passengers have been wary of venturing too far from home, causing overseas travel to plummet. The airport said 1.2 million passengers traveled through it in September, down 82 percent compared with 2019.

Heathrow hopes its new program could be the start of a more expansive testing regime in the airport. For now, the airport will offer a test known as LAMP, which is not as sensitive as PCR testing, used by the country’s national health service. PCR tests can detect active infections even before symptoms appear, though with a daylong turnaround. Heathrow plans to add antigen tests, another type of rapid testing, later.

The airport also said that travelers to Italy would be able to use the test, but Collinson, one of the companies administering the plan, said it was still in talks with the Italian government, the BBC reported.

WASHINGTON — Berkshire Hathaway, the conglomerate owned by Warren Buffett, will pay $4.1 million to the Treasury Department to settle allegations that the company and one of its Turkish subsidiaries violated American sanctions against Iran, department officials said Tuesday in a statement.

Treasury officials said that Berkshire Hathaway’s Turkish subsidiary Iscar Kesici Takim Ticareti ve Imalati Limited Sirket, known as Iscar Turkey, allegedly sold 144 shipments of goods — including cutting tools and disposable inserts — from December 2012 to January 2016 to two intermediary companies knowing they would be resold in Iran.

The transactions, valued at $383,443, violated U.S. sanctions that prohibit American companies from doing business with Tehran. Treasury officials said that Iscar Turkey violated Berkshire’s compliance policies and also “took steps to obfuscate its dealings with Iran, including concealing these activities from Berkshire.”

Iscar Turkey is a unit of IMC International Metalworking Cos., which is based in Israel. In 2006, Berkshire Hathaway bought 80 percent of IMC for $4 billion. In 2013, it bought the remaining 20 percent for $2 billion.

Representatives from Berkshire Hathaway did not immediately respond to a request for comment.

The settlement comes as part of the Trump administration’s effort to exert pressure on Iran, including reimposing sanctions and enforcing penalties on companies that do business with Tehran.

Earlier this month, the Treasury Department imposed sanctions on 18 Iranian banks, effectively locking Iran out of the global financial system and further cratering its already collapsing economy.

The Trump administration last month also unilaterally restored international economic penalties on Tehran that much of the rest of the world has refused to enforce. It also said it was reimposing United Nations sanctions against Iran over the fierce objection of American allies, in part to keep a global arms embargo in place beyond its expiration date of Oct. 18.

The Federal Reserve’s top financial regulator said global officials are digging into what contributed to a near-meltdown of the financial system in March and have pointed to lightly regulated financial players as central to the problem.

As pandemic-spooked investors sold securities and poured into cash in March, critical parts of the financial system came under immense strain. Problems even spilled into the Treasury market, which is at the core of the United States and global financial systems, prompting the Fed to step in with large-scale bond purchases and a number of other market rescues to avert an even broader collapse.

“While central bank action succeeded in restoring market functioning, this support does not address the underlying vulnerabilities spotlighted by the Covid event,” Randal K. Quarles, the Fed’s vice chair for supervision, said in a speech on Tuesday. He noted that the crisis “revealed a banking system that withstood this shock quite well with limited official sector support, and a nonbank system that was significantly more fragile.”

Nonbanks, often called shadow banks because they operate outside of the traditional regulatory system, are a catchall group of lenders, funds and intermediaries that play a critical role in global markets. They required extensive help from the Fed earlier this year to avert catastrophe as credit markets seized up and investors rushed to cash out, leaving companies struggling to roll over short-term debt and funds scrambling to meet redemptions.

Mr. Quarles said that the Financial Stability Board, a global group of regulators that he leads, will publish a report in November that will both diagnose what went wrong and highlight areas for potential reform.

“We know already that work needs to be done to improve the resiliency of money market funds before the vulnerabilities in these funds amplify another shock,” Mr. Quarles said. Money market funds, where investors can park their savings to earn a slightly higher return, saw major outflows in spite of reforms following the 2008 financial crisis that were meant to prevent such runs.

Mr. Quarles said early analysis of the coronavirus-tied financial shock has already “revealed a number of issues that may have caused liquidity imbalances or propagated stress,” though questions about the funding that supports key government debt markets remain, including “the role of leveraged investors and dealer capacity to intermediate in these markets.”

The unwinding of a highly leveraged and widely used hedge fund trade centered on Treasury securities seems to have contributed to problems in March, based on some early analyses.

While the Fed generally approaches financial stability questions from the perspective of bank safety and soundness, Mr. Quarles made it clear in his speech that global overseers need to look further afield in the months ahead.

“The interconnectedness of our financial system means that it is not enough to understand the vulnerabilities arising from the banking sector,” Mr. Quarles said Tuesday. “We must also understand vulnerabilities in the nonbank sector and how shocks are transmitted to or from the nonbank sector.”



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