The US government says it is considering whether to ask a judge to break up search engine giant Google, in a move that could reshape how technology giants do business.

The Department of Justice (DoJ) says the measures may include “structural requirements” to prevent Google from maintaining its internet search “monopoly”.

In response, Google warned that the proposed changes could have unintended consequences for US businesses and consumers.

The DoJ’s announcement comes after a landmark court ruling in August that found Google had maintained its dominance of online search through illegal practices.

The DoJ said in a court filing that it is considering “remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products”.

In a blog post, Google’s vice president of regulatory affairs, Lee-Anne Mulholland, said the recommendations constitute “government overreach”.

The DoJ is expected to submit a more detailed set of proposals by 20 November.

Google will be able to submit its own proposed remedies by 20 December.

The court decision in August was a major blow to Alphabet, Google’s parent company.

It came after a 10-week trial, in which prosecutors accused Google of paying billions of dollars a year to firms, including Apple and Samsung, to ensure it was their default search engine.

Google’s lawyers argued that users are attracted to the search engine because they find it useful, and that Google is investing to make it better for consumers.

Other pending lawsuits against big US technology firms – including Facebook-owner Meta, Amazon and Apple – accusing them of anti-competitive practices.

The lawsuits are part of attempts by US authorities to strengthen competition in the industry.

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Alimentation Couche-Tard has told Japan’s Seven & i Holdings it is willing to pay close to $47bn to take over the convenience store giant, 20 per cent more than its previously rejected bid.

The non-binding offer by the Canadian company was sent to the Tokyo-based owner of the 7-Eleven chain last month and no material negotiations have taken place since, according to people familiar with the matter.

Seven & i shares initially surged more than 10 per cent on the news, which was first reported by Bloomberg, on Wednesday before paring gains to trade up 4 per cent by mid-morning in Tokyo.

Seven & i and Couche-Tard declined to comment.

The Japanese group received and rejected an almost $39bn opening offer from Couche-Tard in September, saying it “grossly undervalues” the business and does not account for the difficulty of getting a deal past competition regulators in the US.

Last month the US Federal Trade Commission told lawyers for the two companies to retain documents linked with the potential merger of their petrol station and convenience store chains.

The combination of Couche-Tard, operator of the Circle K brand, and Seven & i would create one of the largest retail chains in the US.

One person familiar with Seven & i’s thinking said the group was focused on second-quarter results, due to be announced on Thursday, and proving to shareholders it could deliver sufficient value as a standalone entity.

The group has been exploring selling non-core assets to private equity and other investors, while accelerating plans to focus on its convenience store business.

Alongside other plans, the company is considering accelerating the sale of its stake in its financial services arm, Seven Bank, as well as selling its supermarket business.

If accepted, Couche-Tard’s takeover bid would be the largest in Japan by a foreign company and follows years of stop-start progress on corporate governance reform in the country, which has put boards under greater pressure to prioritise shareholders’ interests.

One investor, whose fund holds a substantial stake in Seven & i, said if the company continued to resist Couche-Tard the pressure would now be on the Japanese company.

“It will need to explain why it is rejecting an offer given that the overall valuation has not risen that much since the summer, and the board’s special committee will need to be clearer on what level of price or what conditions would be required for serious negotiations to begin,” said the person who did not wish to be named.

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Richard Barker is a member of the International Sustainability Standards Board and professor of accounting at Oxford university’s Saïd Business School, where he served as deputy dean.

The greatest change we face is the sustainability-related transformation of the global economy. We can either figure out a way to make economic activity sustainable, or the system starts to break down.

There are two alternative outcomes. The first is that global warming remains within the Paris Agreement target of 1.5C. This will mean the change in how we power and operate our economy will be fast and dramatic, and will create winners and losers. The second is if we maintain our trajectory of global warming beyond Paris limits, where the transition to a sustainable economy will be too slow to prevent unprecedented disruption. Winners would be outweighed by losers. Either way, there is change and uncertainty, and thereby opportunity and risk.

A lead indicator of this change is the auto industry, where the transition to electric vehicles has already been disruptive. Tesla is a relatively new entrant, yet its market capitalisation is now roughly equal to the rest of the global top 10 automakers combined. This disruption continues. A truly zero-carbon vehicle is also carbon-free in production. Porsche set a target of (net) carbon neutrality throughout its value chain for new vehicles from 2030. Others will follow.

The case for decarbonising arises because a sustainable economy is more valuable than one heading for collapse

Inevitably, the implication is that Porsche’s suppliers must decarbonise. An example is Norway’s Hydro, which is investing in recycling to produce aluminium with a carbon footprint 30 times lower than the industry average. In turn, there are implications for mining and other industries.

Transitions such as these are not philanthropic, but business decisions, to enhance economic value. The case for decarbonising arises because a sustainable economy is more valuable than one heading for collapse. As this becomes increasingly evident, companies that better manage climate-related risks and opportunities will be the suppliers of choice. There will be more regulation (and taxes or subsidies), changes in consumer preference and greater social pressure on the licence to operate.

This enhances the business case for sustainability, increasing the opportunities for innovation and the risks from business as usual. One example is in electricity generation, where solar and wind have become economically competitive and are gaining market share.

While the climate-driven transition is under way, other transitions will follow. Climate change is one of nine “planetary boundaries” that economic activity cannot sustainably exceed. Others include biodiversity loss, water use, change in land use (like deforestation), and pollution.

With water, withdrawals already exceed sustainable levels in several regions. This problem is set to grow as the effects of climate change reduce flow in glacier-fed rivers. Non-dairy milk is growing, given that oat milk uses 600 litres less water per litre of milk than its dairy alternative. Likewise, the market in second-hand clothing is increasing, reflecting the fact that a cotton T-shirt takes 2,700 litres of water to make.

Land use is integral to food and other renewable natural resources, manufacturing and construction, waste management, climate mitigation and access to critical minerals. All economic activity depends in one way or another upon the resources of nature.

Companies that finance, insure, advise or provide other services to industries are indirectly dependent on natural resources, creating risks and opportunities. In the 2024 World Economic Forum ranking of global risks over a 10-year horizon, the top four are all environmental: extreme weather events; critical change to Earth systems; biodiversity loss and ecosystem collapse; and natural resource shortages.

Executive MBA Ranking 2024

This is an article from the EMBA report publishing on October 14

Your business might be exposed even if its environmental impact is low, such as through vulnerability to climate-related weather events. State Farm, the largest property insurer in the US, stopped offering homeowner insurance in California in 2023, declaring it “necessary . . . to improve the company’s financial strength”. These outcomes have repercussions: the college graduate who can’t get a home loan because she can’t get insurance has an effect on retail banking and on the employer seeking to hire her. Disruption of systems can have widespread consequences, many of them not immediately apparent.

One illustration is pandemic risk, which increases as economic growth causes deforestation and other changes in land use, especially as livestock and wildlife come into closer contact. Preparing for the next Covid-19 might feel like normal business practice in risk management and strategic planning. It should. Global economic activity has reached a scale where a stable climate and an abundance of natural resources can no longer be taken for granted.

Viewed in terms of share price performance and access to capital, investors want to understand how any business is responding to these risks and opportunities. Reporting on sustainability to investors is not a compliance exercise, it is a communication of value creation and business resilience.

IFRS Accounting Standards are now complemented by IFRS Sustainability Disclosure Standards, which are being adopted across global jurisdictions. Both enhance financial reporting, and help companies communicate value-relevant information in the transition to a sustainable economy. 

Views expressed are those of the professor and may not reflect those of the ISSB

Shares in the owner of convenience store giant 7-Eleven have jumped after a report that it has received a new takeover offer from Canadian rival Alimentation Couche-Tard.

The new offer values Japan’s Seven & i Holdings at more than $47bn (£36bn), which is around 20% higher than Couche-Tard’s original offer, according to Bloomberg News.

In September, Seven & i rejected a $38bn approach from Couche-Tard, saying it grossly undervalued the firm and that any potential takeover would face major regulatory hurdles.

BBC News has contacted Couche-Tard and Seven & i for comment.

Seven & i shares were around 5% higher in morning trade in Tokyo after initially jumping by 9.5%.

The new offer was reportedly submitted to Seven & i on 19 September and no discussions between the two sides have taken place since.

After the previous offer was rejected, Seven & i was added by Japan’s Finance Ministry to a list of businesses that are considered to be “core” to the country’s national security.

The move, which is largely considered to have little impact on Couche-Tard’s buyout attempt, forces prospective foreign investors in such Japanese companies to seek a government review.

A Japanese company of Seven & i’s size has never been bought by a firm from overseas.

Historically, companies from Japan were more likely to buy foreign businesses.

Last year, the Japanese government issued new guidelines on mergers and acquisitions, which called on companies to not reject credible takeover offers without proper consideration.

7-Eleven is the world’s biggest convenience store chain, with 85,000 outlets across 20 countries and territories.

If the deal went ahead, Couche-Tard’s footprint in the US and Canada would more than double to about 20,000 sites and create a 100,000-strong global convenience store chain.