The ‘antitrust’ law suit launched by US authorities against Google has been reported as a potential turning point in the dominance of ‘big tech’ — and an echo of the courtroom dramas that diminished the excessive power of America’s late 19th–century oil, steel and railroad barons. But I wonder how much impact it will really have.

The allegation, in brief, is that Google has created an illegal near-monopoly by paying large sums to Apple and other smartphone makers to secure its position as the default search engine for billions of consumers, its grip reinforced by ownership of Android, the phone operating system, and Chrome, the popular browser — all of which also gives it a stranglehold on the digital advertising market. But like the battle a generation ago to diminish the alleged monopoly of Microsoft in the PC market, this one will run for years and enrich armies of lawyers, and most likely end in a fudged settlement.

Even if Google is eventually forced to divest itself of Android — as proponents of the action hope — that’s unlikely to change the habit of a generation of consumers for whom ‘google’ is a verb that (unlike the names of Facebook and Amazon, for example) carries few negative connotations. What’s more, the mass of US investors whose wealth has been bolstered by the stellar share performance of Google’s parent company Alphabet and its peers are likely to see government-led attacks on big tech as a political distraction from more urgent economic threats.

So I have some sympathy with former Google chief Eric Schmidt, who says the antitrust case is misguided, pointing out that ‘there’s a difference between dominance and excellence’. What matters more is that big tech should be forced to pay fair taxes on profits wherever they arise around the world; and that the giants should play a positive role as incubators of next-generation minnows. When one of those innovators comes up with a better search engine, technological Darwinism will ensure that it overtakes — just as Google saw off Yahoo long ago. But I predict the next winner won’t be Bing, the Microsoft search alternative that Schmidt cites as a ‘ruthless’ competitor. My own laptop recently started jumping repeatedly of its own accord from Google to Bing, and it’s nothing but an inferior nuisance.

Red flags ignored

The striking feature of Goldman Sachs’s involvement in Malaysia’s 1MDB scandal — for which the US investment bank has agreed a $2.9 billion settlement with the Department of Justice and New York regulators — is the extent to which warnings from its own compliance officers were ignored or circumvented. 1MDB was a state development fund that became a honeypot for the outrageous lifestyles of the playboy financier Jho Low, who’s still on the run, and the family of prime minister Najib Razak, who’s now serving a 12-year jail term. Goldman is alleged to have joined with Low in paying bribes to win mandates for the fund’s bond issues that earned $600 million in fees — long after its own compliance unit had declared Low ‘a name to be avoided’ and tried to put a stop on dealings with him. The frontline bankers’ response was simply to restructure their deals and rewrite their reports to disguise his involvement.

Goldman chief executive David Solomon has admitted his bank ‘did not adequately address red flags’. There’s an echo here of the sad story of Paul Moore, who died last month: he was the HBoS risk officer turned whistleblower who found himself treated like ‘toxic waste’ — and sacked — when he argued in 2004 that the high-street bank’s aggressive lending policies would lead to disaster, as they duly did. The moral is that in a well-run bank there’s always tension between the risk monitors and the dealmakers, but wise bosses should strike a balance. In bad banks, the compliance function is dismissed and outflanked as an impediment to bonus-hunting — or worse, coerced into silence — and grief inevitably follows.

Bring back dividends

It’s reported that the Bank of England is ‘bartering’ a deal to allow UK banks to start paying dividends to shareholders again — having ordered them to stop doing so when the pandemic struck — so long as lendings continue rising at a sensible rate. Though intended as a prudent measure to strengthen the banks’ balance sheets ahead of an expected wave of business failures and bad debts, the dividend ban also played to popular sentiment that these conventional returns to investors were somehow ‘unfair’ or evidence of ‘City greed’. But they’re not: why should anyone provide capital to any commercial business without appropriate reward?

The major banks are currently brimming with cash and, we’re told, operating well within the capital ratios the Bank of England imposes on them. But with share prices permanently in the doldrums, they are absurdly unattractive to investors — and that in itself is an unhealthy feature of the current financial system. By positively encouraging them to pay dividends, the Bank would not only ease that problem but reassert a benign fundamental principle of how capitalism is supposed to work.

Magic spuds

Herefordshire potato farmer Will Chase deserves recognition as one of Britain’s most resilient entrepreneurs. Soon after taking over his family farm in the early 1990s, he went bankrupt: selling to supermarkets was a hard way to scratch a living. But in 2002 he found a higher-margin use for his produce by creating an upmarket crisp brand, Tyrrells, which is due course he sold for £30 million to private equity investors — who sourced cheaper potatoes elsewhere. So he redeployed his surplus crop to distil Chase vodka and Williams gin, and has now sold the distillery to Diageo for an undisclosed sum. It won’t surprise me if his next trick is to turn spuds into green aviation fuel.