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BRUSSELS The European Union formally extended its economic sanctions on Russia on Wednesday, a widely expected step that keeps restrictions on business with Russian energy, defense and financial sectors until Jan. 31, 2018.

The sanctions were imposed in July 2014 following Russia's annexation of Ukraine's Black Sea peninsula and Moscow's direct support for separatists in eastern Ukraine. Moscow denies direct involvement in the conflict despite NATO's assertions its troops are supporting the rebels.

EU leaders agreed to the extension at their summit in Brussels last week, after France and Germany cited no progress in efforts to negotiate an end to the conflict in eastern Ukraine that has killed more than 10,000 people since April 2014.

Under the sanctions that were imposed in tandem with the United States, European companies are banned from doing business with or investing in Russia's defense and energy industries, while financial ties are severely limited.

European companies cannot borrow or lend money to Russia's five main state-owned banks for more than 30 days, limiting Moscow's avenues for raising funds. Along with restrictions on business with Russia's top energy companies, exports of some energy-related equipment and technology to Russia must also be approved by EU governments.

Any lifting of sanctions on Russia is tied to the implementation of the Minsk peace deal for Ukraine which was negotiated by the leaders of France, Germany, Ukraine and Russia in 2015.

(Reporting by Robin Emmott; Editing by Mark Potter)

SYDNEY/VATICAN CITY Cardinal George Pell, a top adviser to Pope Francis, said on Thursday he was innocent of charges of sexual abuse in his native Australia, and that the pontiff had given him leave of absence to return there to defend himself.

WARSAW A trip to Poland by U.S. President Donald Trump next week may feel like a diplomatic coup for the right-wing government, but western European nations are uneasy it will encourage Warsaw's defiance towards Brussels.

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European Union extends Russia sanctions until Jan 2018 - Reuters

BRUSSELS: The European Union faces a 20-billion-euro hole in its annual budget due to Britains withdrawal and rising costs in issues such as defence, a commissioner said on Wednesday.

EU Budget Commissioner Guenther Oettinger, of Germany, called on the bloc to improve the efficiency of its spending in the wake of Brexit in March 2019. We wont have the UK with us any more, but they were net payers despite the Thatcher rebate, so we will have a gap of 10 to 11 billion euros a year, Oettinger told a press conference as he unveiled the commissions proposals for the budget.

Under late British prime minister Margaret Thatcher, Britain secured an annual rebate on its budget contribution worth more than three billion euros. Oettinger wrote separately in a blog on the proposals that at the same time we need to finance new tasks such as defence, internal security... The total gap could therefore be up to twice as much.

Twenty billion euros would amount to $22.5-billion. The EUs budget in 2017 was 157.9 billion euros.

The German commissioner said that the EU could, after Britain leaves, save money by eliminating all rebates enjoyed by a number of other countries. But it would have to take further measures, he said.

I am ambitious and realistic, he said. The Brexit gap will be financed by a mix of cuts, shifting expenditure, saving, and some new sources of money.

The commissions proposals suggest in particular that EU countries could save a lot of money by cooperating in key areas, as they aim to do on defence post-Brexit.

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Brexit to blow 20-B hole in European Union budget: Commissioner - Economic Times

Back in 1980, Milton Friedman, the University of Chicago economist, starred in a public-television series called Free to Choose, in which he presented his free-market ideas and, famously, told a young man that everything he knew about monopoly power was wrong. In the United States, monopoly was synonymous with evil, an idea going back to Teddy Roosevelt and the original trustbusters, who saw oil cartels and rail syndicates as enemies run by sneering men with bulbous noses. But Friedmans surprising assertion was that monopolies were not the result of greedy people amassing and abusing power but, rather, of stupid government rules. I believe if you examine the sources of monopoly you will find that almost all those sources are government intervention, Friedman argued. The cure for monopoly, he said, was reducing rules and restrictions, which would inspire market competition and prevent a single company from exclusively holding any corner of commerce.

American antitrust law has followed philosophies ranging from trustbuster to the Chicago School. But both sides of this dispute have something in common: they see monopoly power as dangerous because it limits competition and raises prices, hurting consumers. This emphasis on prices is central to the American antitrust world view. Depending on the ideological leanings of the particular Presidential Administration, the goal keeping prices down has been pursued by increasing government (the Roosevelt school of thought) or by reducing it (as in Friedman's message).

Price is the key word in American antitrust lawhigher prices are bad, and lower prices are good. For the European Union, which wrote its own antitrust laws decades later, after the rise of the Internet, the key word is innovation. Monopoly for the Europeans can raise prices, lower prices, or have no impact on prices but still be dangerous because it stifles new ideas. The European Commission has taken a forceful global role in establishing that view, especially under Margrethe Vestager, the current commissioner of competition, who, this week, levied a record $2.7 billion fine against Google for abusing its monopoly power.

The commission said that Google unfairly preferred its own services to those of competitors. When people searched for local restaurants, mechanics, or other services, the search engine placed its own Google-branded ratings far above those of competitors such as TripAdvisor and Yelp. In other cases, Google would put, on its own pages, quotes from places like TripAdvisor and Yelp, decreasing the motivation of searchers to go visit those other sites and depriving them of audience and advertising revenue. Google was, essentially, absorbing their entire business model into itself, and taking all of the ad money that went along with it. The company was doing this, in the opinion of the European Union, by abusing its power as the dominant search engine. (Google is even more dominant in Europe than it is in America, if such a thing is imaginable.) Google, of course, rejected these claims, and is considering an appeal.

What is perhaps most striking about the European Unions decision is that the complaints were all from big, U.S.-based firms: not only TripAdvisor and Yelp but also Microsoft, Oracle, and others. They had pursued Google through the U.S. Federal Trade Commission, to no avail. (Government antitrust lawyers found evidence that Google harmed competitors and consumers but chose not to prosecute.) Under the American antitrust model, a monopoly is a company that clearly controls something of value and uses that power, ultimately, to raise prices, thus hurting competition and consumers.

Googles case shows that the antitrust battle is much more confusing in a digital world. How am I harmed when one service that charges me nothing offers me ratings written (for free) by other users, but doesnt show me the ratings provided by an entirely different free service? It would be hard to explain to Teddy Roosevelt that someone receiving something for free is being harmed because of a lack of other (free) options. It should be better to have multiple sources of reviews and multiple ways of assessing businesses; it should be better for advertisers to have different companies selling ads. But how do we define better in these cases? Google is not the sort of obvious enemy that Teddy Roosevelt could point at with his sword and run up a hill to attack. Nor is there a government switch that can be turned off to create a Friedman-esque release from monopoly power.

The European Union defines antitrust more broadly than U.S. law does, and thus has more subtle lines of attack. It prohibits firms that hold a dominant position on a given market to abuse that position, for example by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers. The phrase for example is doing a lot of work. It is an acknowledgement that government rules and business practices evolve, side by side. Define antitrust as raising prices, and businesses will find a way to abuse monopoly power by lowering prices. Regulators in Europe have discretion to evolve alongside the marketplace. Arguably, their discretion is too vast. It has been hard for anybodygovernment or private sectorto properly predict how future innovation will happen, and how best to support it. However, innovation (and, one might add, data) is clearly as important (if not more important) in this coming century as price. The E.U. laws are, surely, not perfect. But they are closer to the twenty-first century than U.S. laws written at a time of fairly clear oil and railroad monopolies. American law has been stuck in the old continuum between Roosevelt and Friedman. Neither of them is a good guide to this new terrain.

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Teddy Roosevelt Wouldn't Understand the EU's Antitrust Fine Against Google - The New Yorker

The European Union slapped a record $2.7-billion fine on Internet giant Google on Tuesday for allegedly taking advantage of its dominance in online searches to direct customers to its own online shopping business.

European regulators gave the Mountain View, Calif., company 90 days to stop or face more fines of up to 5% of the average daily worldwide revenue of its parent company, Alphabet Inc.

Google says it is considering an appeal.

The European Commission, which polices EU competition rules, alleges Google elevates its shopping service even when other options might have better deals.

The commission said Google gave prominent placement in its search results only to its own comparison shopping service, whilst demoting rival services. It stifled competition on the merits in comparison shopping markets.

What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation, EU Competition Commissioner Margrethe Vestager told reporters.

Google says it's just trying to package its search results in a way that makes it easier for people to find what they want.

When you shop online, you want to find the products you're looking for quickly and easily. And advertisers want to promote those same products. That's why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both, Kent Walker, senior vice president at Google, said in a statement.

We will review the commission's decision in detail as we consider an appeal, and we look forward to continuing to make our case, he said.

The fine is the highest ever imposed in Europe for anti-competitive behavior, exceeding a 1.06-billion-euro penalty on Silicon Valley chip maker Intel in 2009.

But the penalty is likely to leave a bigger dent in Google's pride and reputation than its finances. Alphabet has more than $92 billion in cash, including nearly $56 billion in accounts outside of Europe.

Vestager said the commission's probe, which started in 2008, looked at some 1.7 billion search queries. Investigators found that on average even Google Shopping's most highly ranked rivals only appeared on Page 4 of Google search results. Vestager said that 90% of user-clicks are on Page 1.

As a result, competitors were much less likely to be clicked on, she said.

It is up to Google to decide what changes it wants to make to comply with the commission's ruling, but any remedy must ensure that rival companies receive the same treatment as Google Shopping.

We will monitor Google's compliance closely, Vestager said.

She noted that any company or person who has suffered damages due to the company's practices can make claims to national courts.

More broadly, Vestager said, the probe has established that Google is dominant in general Internet search in all 31 countries of the European economic area. This will affect other cases the European Commission might build against the Internet giant's various businesses, such as Google Images.

She also noted that regulators are making good progress in their other Google probes into Android and search advertising, and that the preliminary conclusion is that they breach EU antitrust rules.

The commission has come under fire in the United States for a perceived bias against U.S. companies.

Vestager said that she has examined statistics concerning antitrust, merger control and state aid decisions and that she can find no facts to support any kind of bias.

Alphabet shares fell 2.5% on Tuesday to $948.09.

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UPDATES:

3:50 p.m.: This article was updated with Alphabets stock movement.

6:35 a.m.: This article was updated throughout with additional details and context, and with comments from Margrethe Vestager and Kent Walker.

This article was originally published at 3 a.m.

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European Union fines Google a record $2.7 billion for ...

Brussels:The European Union and Britain on Friday tripped over the first item in their Brexit talks protecting the rights of each other's citizens highlighting the potential for trouble ahead in their marathon negotiations.

Representational image. AP

While British prime minister Theresa May declared that she had offered a "fair and serious" proposal on citizens' rights, European Union chief Donald Tusk dismissed it as falling "below our expectations." Dutch Prime Minister Mark Rutte said "thousands of questions" remained on the key topic.

The 27 European Union leaders demanded many more details on the United Kingdom proposal to guarantee the rights of the 3 million European Unioncitizens who now live in Britain.

Since many of those citizens will want to stay even as Britain itself leaves the European Union, it is an immediate issue where May has a lot of leverage. The British leader is insisting that the European Union needs to give the 1.5 million Britons living on the continent equal respect. She will outline a more detailed proposal next Monday, when May addresses her parliament in London.

Alongside citizens' rights, the Brexit negotiators will address the substantial bill that Britain will have to pay to quit the European Union and the problems surrounding the border in Ireland.

"I want to reassure all those European Union citizens who are in the United Kingdom, who've made their lives and homes in the United Kingdom, that no one will have to leave, we won't be seeing families split apart. This is a fair and serious offer," May said.

Yet many European Union leaders were nonplussed by May's offer, saying there was a clear deal to leave such Brexit issues to the top negotiators, Michel Barnier for the European Union and David Davis for Britain.

German chancellor Angela Merkel said May's move was "not yet the breakthrough" that EU nations were looking for, adding "there is a long road in front of us." Tusk agreed.

"My first impression is that the United Kingdom's offer is below our expectations, and that it risks worsening the situation of citizens," Tusk said. "It will be for our negotiating team to analyse the offer line by line."

Exactly one year after British voters chose to leave the European Union and after months of political chaos at home, a weakened May sent her team into the Brexit negotiations that began Monday. The issue of citizens' rights was seen as her strongest point to make an immediate impact.

Many said she missed the mark.

"We don't want to buy a pig in a poke," said Belgian prime minister Charles Michel, calling May's opening "an extremely vague proposal for something that is incredibly complicated."

May promised that the fate of European Union citizens would be a priority in Brexit negotiations. She laid out benchmarks for their rights and said they should be shielded from excessive harm because of the political divorce.

German foreign minister Sigmar Gabriel said preserving residency rights for European Unioncitizens was such an indisputable goal that any stumbles over the issue showed how fraught the talks would be.

"The situation must be really tense if such an obvious thing is now considered as news. Of course people should at least have the right to stay, that is a minimum and personally I cannot imagine things differently," Gabriel said in Paris.

Under May's proposal, European Unioncitizens with legal residence in the United Kingdom will not be asked to leave and will be offered a chance to regularize their situation after Brexit. May also promised to cut the burdensome bureaucracy such paperwork can involve. European Union citizens now face an imposing 85-page form to tackle if they want to stay.

Continued here:
Brexit: Britain, European Union clash over first proposal on protecting citizens' rights - Firstpost