Apple and Google lose EU legal appeals

Good morning. In today’s news:

• An exclusive story on PwC in China

• Israel kills 19 in strike on ‘humanitarian’ zone

• A preview of tonight’s highly anticipated presidential debate

But we begin with the tech giants Apple and Google, which have both lost appeals against the EU that could result in billions of dollars in payments.

The EU’s top court, the European Court of Justice, ruled that the iPhone maker must pay €13bn in back taxes to Ireland, overturning an earlier decision in Apple’s favour.

Google’s case relates to recommendations it gave on its internet shopping service. The European Commission fined the search engine group €2.4bn in 2017 for using its own price comparison shopping service to gain an unfair advantage over smaller European rivals. The ECJ today upheld a lower court’s decision, rejecting Google’s appeal.

Javier Espinoza in Brussels is following this developing story.

And here’s what I’m keeping tabs on today:

• Central banks: Bank of Canada governor Tiff Macklem addresses the Canada-UK Chamber of Commerce in London while Federal Reserve vice-chair for supervision Michael Barr speaks on new banking rules at the Brookings Institution in Washington.

• Economic data: Brazil’s statistics agency IBGE publishes consumer price data for August.

• Company results: GameStop is expected to post a fall in quarterly revenue, hurt by slowing sales at its core business of selling new and pre-owned video games.

• US election: Presidential hopefuls Kamala Harris and Donald Trump will come face to face for the first time in tonight’s televised debate in Philadelphia. Here are five things to look out for.

FT journalists will reflect on the debate in an exclusive live webinar on Thursday and look ahead to what it means for November’s election. Register for free.

Five more top stories

1. Donald Trump is escalating his threats to increase tariffs if he wins a second term in the White House. The Republican candidate has vowed to impose 100 per cent levies on imports from countries that move away from using the dollar, reviving fears of renewed trade wars that hit the global economy during his presidency.

• Forget tariffs: If US policymakers are truly concerned with offshoring, they have a potentially efficient tool at their disposal: the tax code, writes Kimberly Clausing of the UCLA School of Law.

2. Exclusive: PwC is set to parachute in a senior partner from the UK to run its business in China as the fallout from its audit of collapsed developer Evergrande continues to mount. Hemione Hudson, a runner-up in the race to lead PwC UK earlier this year, has been tapped to lead the scandal-hit China business. Here’s more on PWC’s highly unusual step.

3. Israeli air strikes on a “humanitarian” zone in Gaza have killed at least 19* people, according to health authorities in the Hamas-controlled enclave. The strikes targeted a cluster of tents in al-Mawasi coastal area, near the southern city of Khan Younis, leaving massive craters in the sand dunes. Neri Zilber in Tel Aviv is following developments.

4. Economists have urged China to spend up to Rmb10tn ($1.4tn) over the next two years to reflate its economy and return it to sustainable growth, as concerns grow that deflationary pressures are becoming entrenched in the world’s second-largest economy. “The longer that deflation stays, the bigger the ask in terms of reflation,” said one China-based economist. Here’s where economists think the government in Beijing should be spending to stimulate the economy.

5. One of the hottest sectors in the hedge fund industry has suffered outflows for the first time in seven years, a sign that investors may finally be losing interest in so-called multi-manager funds. Pioneered by the likes of Ken Griffin’s Citadel and Izzy Englander’s Millennium, the funds have recorded consistent returns — even in bear markets like 2022. But over the past 12 months they have seen net client withdrawals, according to a Goldman Sachs report seen by the Financial Times.

The Big Read

Sudan’s devastating civil war has killed 150,000 people and displaced millions. As well as fighters from neighbouring countries, it has sucked in global and regional actors including Russia, Iran and the United Arab Emirates, each competing for influence in one of Africa’s top gold producers. Andres Schipani reports on how Sudan’s civil war became a global battleground.

We’re also reading and listening to . . . 

• Gideon Rachman: Tonight’s debate gives Kamala Harris a chance to define herself for many voters. She should seize the opportunity.

• Europe: The EU’s economic model is in urgent need of renewal, argues the FT’s editorial board, and it needs an ambitious new agenda.

• Tech Tonic 🎧: John Thornhill and Eva Galperin of the Electronic Frontier Foundation discuss Telegram CEO Pavel Durov’s arrest, encryption technology and digital privacy rights.

Chart of the day

The Bank of England is set to announce plans next week for how much it will shrink its balance sheet by over the coming 12 months. However, the sales of gilts will only cover maturities of three years or longer, while investors say the central bank should include short-dated debt that matures within one to three years.

Take a break from the news

The FT’s Globetrotter has created an expert guide to business and social etiquette in Madrid — from “dos besos” to dining and safe (and unsafe) topics of discussion. This is the latest set of tips for the global business traveller from the FT.

Additional contributions from Irwin Cruz and Benjamin Wilhelm

*This figure has been updated in the underlying story.