The Week in Business: We’ve Been Hacked
The Week in Business: We’ve Been Hacked
It’s going to be another bizarre holiday week. Here’s what you need to know in business and tech for the days ahead, and stay safe. — Charlotte Cowles
What’s Up? (Dec. 13-19)
The Hackers Were Here All Along
In one of the largest and most sophisticated cyberattacks in years, hackers breached the networks at a wide range of government agencies, including at the Treasury and Commerce Departments, as well as a number of major private companies. Even worse, the hacks occurred last spring but were undetected until recent weeks — so the culprit, widely suspected to be a Russian intelligence agency, has been lurking in the government’s networks for most of 2020. The Trump administration has said little about the attack or what information was compromised.
The Pitchforks Are Coming
It’s raining antitrust lawsuits in Silicon Valley, and now it’s Google’s turn to grab an umbrella. Ten states (and counting) accused the company on Wednesday of unlawfully monopolizing the digital advertising business and using its ubiquity to overcharge certain publishers for their ads. “If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” said Ken Paxton, the Texas attorney general who led the legal charges. One day later, more than 30 states accused Google of illegally manipulating search results to push users away from its competitors and toward businesses it was cozy with. Google has denied the claims and says it will defend itself.
Everyone Wins, Everyone Loses
Lawmakers raced to iron out the final wrinkles in a much-needed pandemic aid bill and avoid a government shutdown. The latest draft of the $900 billion legislation (which is one-third the size of what Democrats originally proposed last May) includes $600 in payments for individuals, $300 per week in supplemental unemployment payments, and help for small businesses. But it omits significant aid to state and local governments (a major wish-list item for Democrats) as well as legal protections for businesses (which Republicans wanted) worried about liability in spreading the virus.
What’s Next? (Dec. 20-26)
But First, the Tunnel
The Federal Reserve chair, Jerome H. Powell, is not known to offer overly rosy economic projections. But he sounded almost optimistic this past week when he said that a “light at the end of the tunnel” was visible — although he cautioned that the next few months would be hard. He predicted that the economy would start to recover in the second half of 2021, provided that enough people get vaccinated and can resume their normal activities safely. (Such an outcome became even more possible when a second vaccine, from Moderna, received a thumbs-up from the Food and Drug Administration.) To bolster growth and soothe markets, Mr. Powell said the Fed would keep interest rates near zero and continue buying government-backed debt. He also repeated his call for more federal stimulus to provide a financial “bridge” to those who desperately need it this winter.
Calling the Sheriff
Robinhood, a financial app that allows users to trade stocks easily for free, may sound too good to be true, and has raised a number of red flags with regulators. This past Thursday, the Securities and Exchange Commission said that Robinhood had misled its users about how it was paid by Wall Street firms for passing along trades, and that it had profited at the expense of its customers. Robinhood agreed to pay a $65 million fine to settle the S.E.C.’s charges, without admitting or denying guilt. In a separate case a day earlier, a securities regulator in Massachusetts accused Robinhood of “unscrupulously” encouraging unsophisticated customers to make risky investments.
A Smaller Haul
As the coronavirus picked up speed this fall, it steamrollered job growth, travel plans and holiday spending habits. (Except for Christmas trees. Those are selling at record numbers.) Retail sales ticked down in both October and November, marking a shift from previous months when Americans continued to spend — particularly online — despite economic strife. Of course, earlier this year Americans were bolstered by pandemic aid from the federal government, including stimulus checks and additional unemployment benefits. Now that those funds are running dry, people’s Christmas trees may not have much underneath them this season.